Optimal Partition of the Furniture Manufacturing in Croatia

Abstract

This paper emphasise the clustering of furniture industry as one of the important segments of development strategy of the Croatian economy. Utilizing theoretical and empirical research methods, this study aimed to identify optimal partitioning of seven clusters. In order to identify areas with high concentrations of furniture manufacturers, the fast partitioning algorithm among furniture manufacturers in Croatia – enterprises from class 31.09 – Manufacture of other furniture is used. It is important whereas such areas constituted of industry clusters are favourable for targeted cluster-based development. Previous research suggests that companies within clusters achieve higher level of productivity and growth, reach higher levels of innovation and provide favourable environment for entrepreneurship. Higher industry concentration within a specific geographic area offer numerous advantageous resulted from areas abundant with natural resources, human resources, suitable physical and information infrastructure and positive business environment. Using the fast partitioning algorithm, companies from class 31.09 – Manufacture of other furniture are clustered by geographical location (latitude and longitude), the number of employees, average net salary and value added. The results showed that the optimal partitioning of seven clusters is accomplished with observed five variables and that clusters significantly differ between each other according to the observed features.