Dynamics of Overlapping Clusters: Industrial and Institutional Revolution in the Industrial District of Aachen, 1800‐1860

The economic transition characterizing the process of European industrialization in the 19th century was concentrated on regions rather than on states. In the first half of the 19th century, the region of Aachen (in the west of Prussia) pioneered on the territory of the German states and developed to a powerful industrial district. The implementation and diffusion of the factory system and the economic impact of adapted and new institutions make the core of this paper. Reciprocal interconnections between firms of different clusters shaped the region and created economic dynamics. Investments transgressed the boundaries of single industries and new industries emerged. One important feature of the regional production system was cross-sectional knowledge transfer; a second was institutions supportive to this process.