21 December 2016

This monthly selection of articles has been carried out by Philippe Gugler and Damiano Lepori, the Center for Competitiveness, University of Fribourg. The entire selection, carried out since 2013, can be consulted on the academic articles page of our web.


Enhancing national competitiveness through national cooperation: The case of South Korea and Dubai

By: D. S. Cho, H. C. Moon, W. Yin. Competitiveness Review, Vol. 26 Iss. 5, pp. 482 – 499, 2016.

Abstract: “The purpose of this paper is to explore how countries can make a more efficient and effective cooperation strategy, considering their competitive strengths and weaknesses. Design/methodology/approach – This paper is an exploratory study in examining the efficient way of national cooperation from the competitiveness perspective. By applying the double diamond-based nine-factor model and the framework for the life cycle of national competitiveness, this study proposes the importance of cooperation strategy, considering the current competitiveness status. A case study of two economies of South Korea (hereafter referred to as Korea) and Dubai reveals a potentially substantial cooperative relationship. Although Korea and Dubai are geographically and culturally distant, they share complementary resources to enhance their overall competitiveness. In addition, their past experiences of growth can effectively deal with their current challenges and help their economies move to more advanced stage. The methodology used in this paper can provide a useful guideline for policy makers to examine the current development status of their economies, find an appropriate cooperation partner and decide the priority of cooperating areas. Although most existing studies explain national competitiveness from a narrow perspective, this paper provides a more comprehensive analysis using the extended model of Porter’s single diamond model. In addition, this paper conducts an intensive case study of Dubai and Korea for possible cooperation.” [ABSTRACT FROM AUTHORS]


Agglomeration economies, productivity, and quality upgrading: Evidence from Japan

By: H. Saito, T. Matsuura. RIETI Discussion Paper Series 16-E-085, 2016.

Abstract: “Empirical studies on agglomeration have focused on the identification of its productivity-enhancement effects. A reduction in marginal costs due to agglomeration economies increases the operating profit of firms, which enables them to employ more inputs to produce higher-quality products. This study examines such effects of agglomeration on product quality by using plant-product-level data for Japanese manufacturing. Empirical findings confirm that product quality increases with the market size of regions, suggesting that agglomeration-inducing polices are effective for increasing firms’ profits by improving both productivity and product quality. Stated differently, our results indicate that the benefits of agglomeration on profits are underestimated in previous studies by ignoring its contribution to quality upgrading.” [ABSTRACT FROM AUTHORS]


A critical review of entrepreneurial ecosystems: towards a future research agenda

By: Y. Borissenko, R. Boschma. CIRCLE Papers in Evolutionary Economic Geography 16.30, 2016.

Abstract: “The Entrepreneurial Ecosystem (EE) literature has attracted much attention, especially in policy circles. However, the concept suffers from a number of shortcomings: (1) it lacks a clear analytical framework that makes explicit what is cause and what is effect in an entrepreneurial system; (2) while being a systemic concept, the EE has not yet fully exploited insights from network theory, and it is not always clear in what way the proposed elements are connected in an entrepreneurial system; (3) it remains a challenge what institutions (and at what spatial scale) impact on the structure and performance of EE; (4) studies have often focused on the EE in single regions or clusters, but lack a comparative and multi-scalar perspective; (5) the EE literature tends to provide a static framework taking a snapshot of EE without considering systematically their evolution over time. For each of these shortcomings, we make a number of suggestions to take up in future research on EE.” [ABSTRACT FROM AUTHORS]


The Revival of Industrial Cluster Policies: Implications to the Egyptian Context

By: M. K. Aboul-Kheir. Review of Economics and Political Science, Vol. 1, No. 4, 2016.

Abstract: “This paper discusses the institutional set up necessary for cluster development in any country, drawing expertise from the European Union as a case study. The choice of the European Union as a benchmark for cluster development actions is based on Europe 2020 Strategy, launched in 2010 to address the negative effect of the financial crisis on the European industry and the fierce competition from rising developing markets mainly China and India.  In the new strategy: The European Union has clusters as a pivotal policy in developing SMEs as a mean to integrate them in the international value chain, from raw material sourcing to after sales services : the whole cycle. In order to achieve that objective, the Union initiated a set of organizations and institutions to ensure clusters best practice and accreditation to best performing clusters. Cluster manager also, is a new function that is gaining a lot of momentum. Proper institutions facilitate the matchmaking of SMEs wishing to integrate into world-class clusters aiming for excellence and cross-European value chains. The focus will extend on cross-sectoral and cross border collaboration and innovation. In the 1990s, cluster development was mostly entrepreneurial left to the private sector, in recent years the role of governments has been central.  In Egypt the case is quite different where there is no national strategy on cluster development and the institutional set up is at best disjointed.  The aim of the paper is to give an in depth analysis of all the main requirements to build strong institutions in this field to ensure better competitiveness for Egyptian firms.  The timing is also important since the Egyptian government is putting a lot of emphasis on Suez Canal development where announced official speeches address clusters in this area.” [ABSTRACT FROM AUTHOR]


The dynamics of cluster entrepreneurship: Knowledge legacy from parents or agglomeration effects? The case of the Castellon ceramic tile district

By: J.-L. Hervas-Oliver, M. Lleo, R. Cervello. Research Policy, Vol. 46, Iss. 1, pp. 72-93, 2017.

Abstract: “What are the main mechanisms driving the process of industry clustering? There is a tension between two different perspectives as regards explaining entrepreneurship and spatial concentration: the roles played by agglomeration economies and knowledge legacies passed on from parents to spawns or spinoffs. Using qualitative interviews and archival data analysis, this paper tracks the evolution and the organi- zational reproduction of the ceramic tile cluster of Castellon (Spain) since its inception in 1727. Results show the existence of agglomeration and socially-based co-operation forces. Beyond de novo spinoffs, abundant social capital in highly agglomerated regions facilitates co-operation and new firm formation, and even co-operation amongst competitors to create new firms. Socially-based networks, reinforced by agglomeration externalities, all act as learning mechanisms to build pre-entry capabilities in new ventures, complementing Klepper’s inheritance perspective. Spatial concentration of an industry can be attributed to the benefits of agglomeration and socially-based co-operation, in combination with the influence of knowledge legacies in a complementary and synergistic process. Conclusions are framed within the knowledge spillover theory of entrepreneurship, shedding light on how entrepreneurship occurs in clusters.” [ABSTRACT FROM AUTHORS]


The city as innovation machine

By: R. Florida, P. Adler, C. Mellander. Regional Studies, 50th Anniversary Special Issue, 2016.

Abstract: “The city as innovation machine. Regional Studies. This paper puts cities and urban regions at the very centre of the processes of innovation and entrepreneurship. It combines the insights of Jane Jacobs and recent urban research on the role of the city with the literature on innovation and entrepreneurship going back to Joseph Schumpeter. Innovation and entrepreneurship and their geography privileges the firm, industry clusters and/or the individual and poses the city as a container for them. By marrying Jacobs’ insights on cities to those of Schumpeter on innovation, it is argued that innovation and entrepreneurship do not simply take in place in cities but in fact require them.” [ABSTRACT FROM AUTHORS]


New path development between innovation systems and individual actors

By: A. Isaksen, S.-E. Jakobsen. European Planning Studies, Guest Editorial, 2016.

Abstract: “This special issue is devoted to studying mechanisms that may stimulate or hamper the renewal of existing industry paths and the growth of new paths. In this guest editorial, we look closely at the role of policy instruments in situations where the majority of regional industries are embedded in strong regional and/or national innovation systems. This theme is currently very relevant in (parts of) Norway, where the dominant oil sector is downsizing and new growth paths are required to maintain employment and welfare. The guest editorial presents a theoretical framework for new regional industrial path development, followed by a discussion on how two Norwegian policy tools contribute to new path development. The 10 articles of the special issue study different aspects of new regional industrial path development based on cases in Norway, Sweden and Spain. Some papers also discuss the role of policy in new path development. Based on the findings from these articles, we believe that new path development is fostered by policies that incorporate both actor-based and system-based elements. Such policy mix could provide a vital push towards new path development.” [ABSTRACT FROM AUTHORS]


Classifying Industries Into Types of Relative Concentration

By: L. von Auer, A. Stepanyan, M. Trede. CQE Paper 55/2016, 2016.

Abstract: “When some industries are overrepresented in urban areas (urban concentration), some other industries must be overrepresented in rural areas (rural concentration). Existing measures of concentration do not distinguish between these different types of concen- tration. Instead, they rank industries according to their degree of concentration. How- ever, knowing the concentration type is important, when investigating the forces of agglomeration that shape the geographical distribution of an industry. Therefore, the present paper proposes a new statistical approach that classifies each industry into one of seven different geographical patterns, five of which represent different types of con- centration. The statistical identification of each industry’s geographical pattern is based on two Goodman-Kruskal rank correlation coefficients. The power of our approach is illustrated by German employment data on 613 different industries in 412 regions.” [ABSTRACT FROM AUTHORS]


Regional Concentration of Industry in China: decentralised choices or a central plan?

By: S. Sheppard, D. Zhao. Department of Economics, Williams College, 2016.

Abstract : “The economic growth and development of China during the past 35 years has been associated with profound impacts on the well-being of the Chinese people, on patterns of global trade and prices of man- ufactured goods, and on industrial location within China itself. Many would view China’s government and its policies as the dominant, perhaps exclusive, force in determining location and concentration of Chinese industry. This raises the question: can a theoretical approach based on decentralised optimization and location choice provide insights concerning the ongoing changes in industrial concentration in China? We address this question, putting forward a simple model and testing it using Chinese data.” [ABSTRACT FROM AUTHORS]


Testing for Agglomeration Economies and Firm Selection in Spatial Productivity Differences: The case of Japan

By: K. Kondo. RIETI Discussion Paper Series 16-E-098, 2016.

Abstract: “This study explores why firms, on average, are more productive in larger cities. One major explanation is that the higher firm productivity in larger cities is the result of agglomeration economies. However, recent studies have proposed an alternative mechanism of selection; namely, tougher competition in larger cities forces less-productive firms to exit and, as a result, more-productive firms operate in such locations. To distinguish agglomeration economies from firm selection, this study applies a newly suggested quantile approach to the Japanese manufacturing sector. Overall, the empirical results show that agglomeration economies, rather than stronger selection in larger cities, better explain spatial productivity differences in the Japanese manufacturing sector. The findings also show that benefits from agglomeration economies in this sector have decreased as interregional accessibility has increased.” [ABSTRACT FROM AUTHORS]


Non-linear externalities in firm localization

By: G. Bottazzi, U. M. Gragnolati, F. Vanni. Regional Studies, forthcoming special issue, 2016.

Abstract : “This paper presents a model of firm localization in which the intrinsic advantages of regions are disentangled from localized externalities, while this latter force is allowed to have a quadratic shape. Through inferential analysis, it is verified whether the quadratic component of localized externalities is statistically different from zero. Such a term can reflect more-than-linear positive feedbacks as well as congestion effects, so that the sign of the interdependencies stemming from localization is not assumed a priori to be positive. The main result is that the quadratic term is virtually never statistically different from zero across Italian sectors observed at the scale of commuting zones, so that localized externalities seem to be well approximated by a linear specification.” [ABSTRACT FROM AUTHORS]


Firms’ knowledge search and local knowledge externalities in innovation performance

By: S. Roper, J. H. Love, K. Bonner. Research Policy, Vol. 46, Iss. 1, pp. 43-56, 2017.

Abstract: “We use an augmented version of the UK Innovation Surveys 4–7 to explore firm-level and local area openness externalities on firms’ innovation performance. We find strong evidence of the value of exter- nal knowledge acquisition both through interactive collaboration and non-interactive contacts such as demonstration effects, copying or reverse engineering. Levels of knowledge search activity remain well below the private optimum, however, due perhaps to informational market failures. We also find strong positive externalities of openness resulting from the intensity of local interactive knowledge search—a knowledge diffusion effect. However, there are strong negative externalities resulting from the intensity of local non-interactive knowledge search—a competition effect. Our results provide support for local initiatives to support innovation partnering and counter illegal copying or counterfeiting. We find no significant relationship between either local labour quality or employment composition and innovative outputs.” [ABSTRACT FROM AUTHORS]