15 December 2018

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.



Cluster dynamics of financial centres in the UK: do connected firms grow faster?

By: V. Pažitka, D. Wójcik. Regional Studies, DOI: 10.1080/00343404.2018.1531116, 2018.

Abstract: “This study investigates the connection between network centrality and firm growth on a sample of 3224 financial services firms located in the UK in the aftermath of the global financial crisis. The findings, based on a spatial econometric model of long-term firm growth, indicate that firms that span structural holes, engage in co-management appointments and have network connections to related companies in other financial centres grow faster. In contrast, such connections generate substantial negative indirect effects on proximate firms, leading to a divergence of growth rates between globally connected and locally embedded firms.” [ABSTRACT FROM AUTHORS]


Digital Innovation Hubs in Smart Specialisation Strategies

By: G. Rissola, J. Sörvik. EUR 29374 EN, Publications Office of the European Union, Luxembourg, ISBN 978-92-79-94828-2, doi:10.2760/475335, JRC113111, 2018.

Abstract: “This report examines the synergetic place-based relationships of Digital Innovation Hubs (DIH) and Smart Specialisation Strategies (S3) in selected European regions, with DIHs being the policy outcome of a S3 process or an active actor participating in S3 entrepreneurial discovery processes (EDP) and implementing parts of a S3. By supporting the digitisation of the local industry DIHs also enhance the regional innovation ecosystem, either with the provision of horizontal digitalisation support or by leading a S3 priority area. One clear role of DIHs is to make available support easier to find for local SMEs and industry. DIHs work according to different business models and a targeted funding mix plus a matrix of different funding instruments for the digital transformation of SMEs are required for their sustainability. The report compiles 7 relevant examples (1 national and 6 regional).” [ABSTRACT FROM AUTHORS]


Move a Little Closer? Information Sharing and the Spatial Clustering of Bank Branches

By: S. Qi, R. De Haas, S. Ongena, S. Straetmans. Tilburg, Center for Economic Research, CentER Discussion Paper, Vol. 2018-038, 2018.

Abstract: “We study how information sharing between banks influences the geographical clustering of branches. We construct a spatial oligopoly model with price competition that explains why bank branches cluster and how the introduction of information sharing impacts clustering. Dynamic data on 59,333 branches operated by 676 banks in 22 countries between 1995 and 2012 allow us to test the hypotheses derived from our model. We find that information sharing spurs banks to open branches in localities that are new to them, but that are already well served by other banks. Information sharing also allows firms to borrow from more distant banks.” [ABSTRACT FROM AUTHORS]


Overcoming frictions in transnational knowledge flows: challenges of connecting, sense-making and integrating

By: H. Bathelt, J. A. Cantwell, R. Mudamby. Journal of Economic Geography, Vol. 18, Iss. 5, pp. 1001–1022, 2018.

Abstract: “The increasing interconnection of local, trans-local and transnational knowledge networks is the outcome of the coevolution of (i) knowledge centers, typically city regions, (ii) epistemic communities that are grounded in and connect these regions and (iii) firms, usually multinational enterprises (MNEs). This interaction has created opportunities for innovation, but it is also impeded by a range of frictions that arise in the process of integrating locally embedded knowledge from geographically dispersed and culturally disparate regions across different countries. This article develops a simple model of how such frictions that MNEs encounter in their knowledge internationalization process can be overcome through ongoing processes of connecting, sense-making and integrating.” [ABSTRACT FROM AUTHORS]


Regional innovation evolution and economic performance

By: R. Capello, C. Lenzi. Regional Studies, DOI: 10.1080/00343404.2018.1502421, 2018.

Abstract: “Conceptual reflections and empirical evidence on the evolution of regional innovation processes are increasing in recent years. This paper contributes to this debate by focusing on the long-term implications that evolutionary changes in regional innovation patterns – intended as alternative combinations of territorial structural conditions and phases of the innovation process – can have on regional economic dynamics. By applying the regional innovation pattern framework in a dynamic perspective, it shows that structural changes in regional innovation patterns positively influence regional economic performance. From these results, reflections on regional innovation policy in the European Union context are drawn.” [ABSTRACT FROM AUTHORS]


Technology intensity and agglomeration economies

By: J. Liang, S. J. Goetz. Research Policy, Vol. 47, Iss. 10, pp. 1990-1995, 2018.

Abstract: “This article investigates the relationship between industry technology intensity and the impacts of agglomeration economies on industrial growth. Many recent studies suggest the actual economic impacts of different forms of agglomeration economies depend on industrial characteristics such as technology intensity, but systematic empirical evidence is still lacking. To fill this gap, we analyze employment data covering all 3-digit NAICS industries of U.S. counties. The results confirm that technology-intensive industries are more likely to benefit from Jacobs spillovers as measured by related variety, while sectors with low technology intensities can better benefit from MAR spillovers as measured by regional specialization.” [ABSTRACT FROM AUTHORS]


Knowledge exchange in clusters: The contingent role of regional inventive concentration

By: A. Vestal, E. Danneels. Research Policy, Vol. 47, Iss. 10, pp. 1887-1903, 2018.

Abstract: “Geographic clusters confer advantages to collocated firms, in particular access to local know-how. This article argues that the access to local know-how is contingent on the extent to which inventive activity is concentrated in the cluster. We draw on sociological theories of generalized exchange to argue that contrasting logics of exchange emerge in geographic clusters that have opposing effects on the extent to which firms benefit from collaborating with local organizations and source local knowledge. A longitudinal data set of 1903 firms engaged in nanotechnology research is used to examine the relationship between firm co-authorships on scientific articles with firms and public research organizations (PROs) and firm inventive performance. Results indicate that when cluster-level firm inventive concentration is high, collaborations with local firms are associated with lower inventive performance. We also find that firms source less local knowledge for their own inventions when firm inventive concentration is high. In contrast, concentrated inventive activity among PROs increases the positive relationship between collaborations with local PROs and firm inventive performance. Results also show firms source more knowledge from local PROs when local PRO inventive concentration is high. The findings suggest that inventive concentration both helps and hinders spill-over of cutting-edge knowledge.” [ABSTRACT FROM AUTHORS]


Technological Coherence and the Adaptive Resilience of Regional Economies

By: S. Rocchetta, A. Mina. Laboratory of Economics and Management, LEM Working Paper Series, ISSN: 2284-0400, 2018.

Abstract: “This paper explores the effect of different regional technological profiles on the resilience of regional economies to exogenous shocks. It presents an empirical examination of the determinants of resilience through panel analyses of UK NUTS III level data for the 2004-2012 period. The results indicate that regions endowed with technologically coherent – and not simply diversified – knowledge bases are better prepared to face an unforeseen downturn and display adaptive resilience. Moreover, local economies tend to be more adaptable if they innovate in sectors with the strongest growth opportunities, even though firms’ net entry does not appear to contribute significantly towards resilience.” [ABSTRACT FROM AUTHORS]


Endogenous local labour markets, regional aggregation and agglomeration economies

By: J. Meekes, W. H. J. Hassink. Utrecht University School of Economics, Tjalling C. Koopmans Research Institute, U.S.E. Discussion Paper Series No. 18-03, 2018.

Abstract: “In this paper, we examine the structure of workers’ local labour market (LLM) and its economic consequences. We endogenise workers’ LLM to commuting outcomes and worker characteristics. The descriptive results indicate that both male workers and high-educated workers especially are characterised by large LLMs. The empirical results show that the urban wage premium (UWP), explained by the returns to agglomeration in wages, increases by a magnitude of two to three in the level of regional aggregation. We also focus on subgroup differentials in the returns to agglomeration economies. High-educated workers experience a higher UWP than low-educated workers, but we find no systematic difference between the UWP of men and women when holding the regional aggregation level constant. In addition, we examine the returns to agglomeration in wages and employment for workers who experienced job displacement. We show that at a relatively high level of regional aggregation, displaced workers in dense LLMs, compared to displaced workers in more sparse LLMs, experience modest losses in wages and comparable losses in employment.” [ABSTRACT FROM AUTHORS]


Regional Alignment and Productivity Growth

By: L. Dibiaggio, B. Montmartin, L. Nesta. Sciences Po, OFCE Working Paper No. 25, 2018.

Abstract: “We propose the concept of regional alignment to suggest that synergistic relations among the scientific expertise, technological specialization and industry composition of regions affect regional productivity growth. In this paper, we test an extended conditional β-convergence model using data on 94 French departments (NUTS3) for the period 2001-2011. Our results indicate that a conditional β-convergence is associated with a σ-divergence process in the total factor productivity (TFP) growth of French regions. This process is strongly affected by the level of regional alignment. Indeed, we find evidence that regional alignment both directly and indirectly influences regional productivity growth. The indirect effect of regional alignment materializes through its leverage on R&D investment, which is one of the most important drivers of productivity growth. Moreover, using a heterogeneous coefficients model, we show that the positive effect of regional alignment on TFP growth increases with the industrial diversity of regions, which suggests that regional alignment increases the value of Jacobs externalities more than Marshall-Arrow- Romer (MAR) externalities.”  [ABSTRACT FROM AUTHORS]


Location factors in foreign direct investment at the local level: the case of Poland

By: W. Dziemianowicza, J. Łukomskab, A. A. Ambroziakc. Regional Studies, DOI: 10.1080/00343404.2018.1530750, 2018.

Abstract: “Location factors of foreign direct investment (FDI) can be influenced by local authorities. This paper examines the hypothesis that local authorities’ actions have only a minor impact on location decisions made by foreign investors in Polish gminas (communes). Foreign investors are attracted to Poland, and to specific locations in gminas which offer investment plots, by a series of instruments designed as incentives and offered at selected levels of administration. The results of the regression analyses using panel data positively verify the hypothesis and draw attention to the commitment of Polish entrepreneurs and the development of labour markets as the main drivers determining the inflow of investment projects into gminas.”  [ABSTRACT FROM AUTHORS]