The author's aim is to construct and validate empirically a theoretical model that allows performance and competitiveness in firms located in industrial districts to be explained. From the strategic perspective adopted, economic revenues are explained by three types of advantage: shared advantages, competitive advantages, and comparative advantages. Neither integration in the district, nor its attraction due to the shared competences within it, are significant predictors of performance. Empirical results indicate that organisational performance is largely explained by the joint effect of firm distinctive competences and cluster-shared competences. It was also found that the greater the degree of a firm's embeddedness in an industrial district, the greater the effect of its distinctive competences on organisational performance. This evidence suggests that firms which are better endowed with resources and capabilities find the development of sustainable competitive advantages easier when they locate in industrial clusters, as they are more capable of capitalising on the potential for economic rents that these clusters offer. Therefore, the internal heterogeneity of the cluster stems from the different patterns of appropriation of shared competences. In addition, firm embeddedness in an industrial district is also revealed as a moderating variable in the relationship between shared competences and global performance/average return on assets, explained by the positive effects of the participation in models, values, and knowledge flows circulating within the cluster.
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