Abstract: “There is a vast literature on the advantages of agglomeration due to positive externalities arising within industrial concentrations like clusters or industrial districts. Empirical studies strongly suggest these benefits when the focus is on innovation or transmission of knowledge. If this is the case, then it is reasonable to expect that cluster benefits should result in better financial performance and higher solvency for clustered firms soon or later. However, the limited empirical support for the link between clusters and economic performance provides contradictory results. This paper goes deeper into this matter and aims to measure the resulting effects on the solvency of firms in agglomeration economies. Empirical analysis has been applied to a sample of 609 firms in the Spanish ceramic tile cluster to test for statistically significant differences in the levels of solvency between clustered and isolated firms. Then we analyze whether firm size and phase of the economic cycle ar”

Keywords: industry clusters, firm solvency, firm size, economic cycle