There are now several dozens of industry clustering projects being conducted worldwide aimed at encouraging economic growth and development within countries and regions. However, there are surprisingly few studies that have critically examined the effects of clustering on firm performance. The aim of this study is to test whether or not industry clustering does in fact have a significant effect on competitive performance across a number of different industry sectors using multilevel spatial statistical methods. The study shows that although significant clustering effects can be observed in industries, the link to firm performance is less clear.