Winner Take All: Palm Oil and Cluster Competition (1900-1970 ca.)

Historically, agricultural crops have been transferred from their native locations to climatically similar ones. In the case of palm oil, the new location (Southeast Asia) outcompeted the native one (West Africa), thanks to a superior cluster organizational structure inherited from rubber. This paper analyses archival material from public and private institutions operating in both locations to explore the often neglected topic of competition between different cluster locations specializing in homogenous products. The case extends the knowledge-based approach to cluster theory, traditionally focusing on collaboration across distant locations, to the dynamics of competition. The analysis concludes that: (i) clusters interact and advance through the exchange of knowledge on a shared institutional platform; (ii) competition emerges when players from one location increase their influence over the institutional platform to gain control over knowledge generation and transmission; and (iii) the comparative evaluation of business environments and their political risk complement location specificity in assessing cluster competitiveness.