27 January 2015

This monthly selection of articles has been carried out by Philippe Gugler and Michael Keller, the Center for Competitiveness, University of Fribourg. A full selection of the previous articles is available here.

Industrial Dynamics and Clusters: A Survey

By : Koen Frenken, Elena Cefis and Erik Stam. Regional Studies, Volume 49, Issue 1, Pages 10-27, 2015.

Abstract: « This paper reviews the literature on clusters and their effects on the entry, exit and growth of firms as well on the evolutionary dynamics underlying the process of cluster formation. This extensive review shows that there is strong evidence that clusters promote entry, but little evidence that clusters enhance firm growth and firm survival. From a number of open questions various future research avenues are distilled that stress the importance of firm heterogeneity and the exact mechanisms underlying localization economies.» [ABSTRACT FROM AUTHORS]


Perspectives on Cluster Evolution: Critical Review and Future Research Issues

By : Michaela Trippl, Markus Grillitsch, Arne Isaksen and Tanja Sinozic. European Planning Studies, published online, 13 Jan 2015.

Abstract: « he past two decades have witnessed an ever-growing scholarly interest in regional clusters. The focus of research has mainly been on exploring why clusters exist and what characteristics “functioning” clusters possess. Although the interest in more dynamic views on clusters is not new, in recent years, however, greater attention has been paid to providing better explanations of how clusters change and develop over time, giving rise to an increasing popularity of the cluster life-cycle approach. This paper discusses the key ideas and arguments put forward by the main protagonists of this approach and identifies several missing elements, such as indifference to place-specific factors, neglect of multi-scalar impacts and underappreciation of the role of human agency. Based on this critical assessment, a number of suggestions for future research are made. We argue that there is a need to study the influence of the wider regional environment on cluster evolution and to explore how cluster development paths are influenced by a multiplicity of factors and processes at various spatial scales. Finally, it is claimed that future research should pay more attention to the role of human agents and the ways they shape the long-term development of regional clusters. We outline how future studies can tackle these issues.» [ABSTRACT FROM AUTHORS]


Network Linkages and Local Embeddedness of Foreign Ventures in China: The Case of Suzhou Municipality

By : Y. H. Dennis Wei. Regional Studies, Volume 49, Issue 2, Pages 287-299, 2015.

Abstract: « This paper analyses foreign direct investment (FDI) in Suzhou municipality, China, known for the Sunan model of development based on township and village enterprises. Suzhou has been remaking its development model by attracting FDI and making itself an innovative place. It is argued that local states play an important, yet diminishing, role in FDI location, with the rising significance of agglomeration effects. However, foreign ventures tend to network among themselves. They remain thinly embedded with local economies and strategic coupling rarely exists. Four mismatches – technological, structural, institutional and spatial – are proposed to explain this weak embeddedness. Suzhou's development path requires expansion of endogenous capacities.» [ABSTRACT FROM AUTHOR]


On the notion of regional economic resilience: conceptualization and explanation

By : Ron Martin and Peter Sunley. Journal of Economic Geography, Volume 15, Issue 1, Pages 1-42, 2015.

Abstract: « Over the past few years a new buzzword has entered academic, political and public discourse: the notion of resilience, a term invoked to describe how an entity or system responds to shocks and disturbances. Although the concept has been used for some time in ecology and psychology, it is now invoked in diverse contexts, both as a perceived (and typically positive) attribute of an object, entity or system and, more normatively, as a desired feature that should somehow be promoted or fostered. As part of this development, the notion of resilience is rapidly becoming part of the conceptual and analytical lexicon of regional and local economic studies: there is increasing interest in the resilience of regional, local and urban economies. Further, resilience is rapidly emerging as an idea ‘whose time has come’ in policy debates: a new imperative of ‘constructing’ or ‘building’ regional and urban economic resilience is gaining currency. However, this rush to use the idea of regional and local economic resilience in policy circles has arguably run somewhat ahead of our understanding of the concept. There is still considerable ambiguity about what, precisely, is meant by the notion of regional economic resilience, about how it should be conceptualized and measured, what its determinants are, and how it links to patterns of long-run regional growth. The aim of this article is to address these and related questions on the meaning and explanation of regional economic resilience and thereby to outline the directions of a research agenda.» [ABSTRACT FROM AUTHORS]


Who Benefits from Agglomeration?

By : David L. Rigby and W. Mark Brown. Regional Studies, Volume 49, Issue 1, Pages 28-43, 2015.

Abstract: « Theories of the firm and strategic management argue that competitive advantage originates in the development and exploitation of assets or capabilities that may be internal or external to the firm. It might be anticipated that older, larger, foreign-owned and multi-plant firms draw upon internal resources more readily than young, small, domestic, single-plant firms. Do the benefits of agglomeration vary among business establishments according to their characteristics? This question is examined using plant-level, longitudinal, micro-data from the Canadian manufacturing sector. It is shown that most manufacturing plants benefit from co-location, but that plants with different characteristics benefit in different ways.» [ABSTRACT FROM AUTHORS]


The economic geography of offshore incorporation in tax havens and offshore financial centres: the case of Chinese MNEs

By : Peter J. Buckley, Dylan Sutherland, Hinrich Voss, and Ahmad El-Gohari. Journal of Economic Geography, Volume 15, Issue 1, Pages 103-128, 2015.

Abstract: « A large share of the outward foreign direct investment (FDI) of emerging market MNEs is directed towards a small number of specific tax havens and offshore financial centres. The establishment of investment-holding companies for taxation related purposes is frequently adduced as a key motivation (‘round-tripping’) for these investments. This explanation, however, accounts for neither the concentration of such investments in specific havens nor the comparatively large national shares of such investments that originate from emerging markets. Here we draw from and build links between the geography of money and finance and international business literatures to conceptually and empirically explore this prominent, if somewhat disregarded, feature of global FDI flows.» [ABSTRACT FROM AUTHORS]


Spatial Concentration of Industries and New Firm Exits: Does this Relationship Differ between Exits by Closure and by M&A?

By : Anet Weterings and Orietta Marsili. Regional Studies, Volume 49, Issue 1, Pages 44-58, 2015.

Abstract: « This study shows that the effect of the spatial concentration of industries on the post-entry hazards of new firms differs by type of exit, and by industry. New firms located in regions with a higher relative concentration of firms in the same industry are less likely to exit by closing activities and more likely to exit by mergers and acquisitions (M&As). While localization economies that favour new firms' survival or a potentially successful exit through M&As are dominant in manufacturing, new firms in business services also experience increasing competition from new entrants that lowers the likelihood of survival and exit through M&As.» [ABSTRACT FROM AUTHORS]


The Evolution of Innovation Networks and Spin-off Entrepreneurship: The Case of RAD

By : Amnon Frenkel, Emil Israel and Shlomo Maital. European Planning Studies, published online, 13 Jan 2015.

Abstract: « We conducted an in-depth analysis of an Israeli startup, RAD Bynet, founded in 1981, that has intentionally, through the vision of its founder, given rise to 129 other startups employing some 15,000 workers, and created a unique “cloud”. Through a survey of the existing firms, we sought to explore the nature of this ecosystem and to quantify the relationships that exist between the mother company and the enterprises that emerge from it. Our main findings were: (a) social and technological proximity encourages the tendency of the companies to maintain business relationships that probably contribute to knowledge exchange, while technological diversity drives innovation and startup formation; and (b) firms will choose to cooperate on the basis of a shared past and personal proximity relations, as well as technological proximity at a certain level; “viral clouds” of startups like the one we studied can thus intentionally be designed and developed.» [ABSTRACT FROM AUTHORS]


Cities and Clusters: Economy-Wide and Sector-Specific Effects in Corporate Location

By : Giulio Bottazzi and Ugo Gragnolati. Regional Studies, Volume 49, Issue 1, Pages 113-129, 2015.

Abstract: « Are the observed spatial distributions of firms decided mostly by economy-wide urbanization economies or rather by sector-specific localization economies? This paper finds that the latter kind of forces weight systematically more than the former in deciding firm location. The analysis uses Italian data on a variety of manufacturing and service sectors spatially disaggregated at the level of local labour market areas.» [ABSTRACT FROM AUTHORS]


The geographic origins of radical technological paradigms: A configurational study

By : Brett Anitra Gilbert and Joanna Tochman Campbell. Research Policy, Volume 44, Issue 2, Pages 311–327, 2015.

Abstract: « History and place matter for the emergence of new technological paradigms. However, limited empirical evidence exists that reflects the characteristics that support or hinder the development of radical technologies within regions. In this study, we theorize geographic regions as distinct socio-economic-political systems with different resources for radical technological development. We integrate evolutionary economic geography and technology management literatures with universities positioned as key drivers for radical technology development within regions. We use the creation of a university research center for a radical technological design as evidence of new technology paradigm emergence. The framework explains the influence of intellectual, industry, social, and political characteristics on the geographic origins of radical technological paradigms. It is tested using a configurational approach – fuzzy set qualitative comparative analysis – in the emerging fuel cell technology context, which is a radical paradigm for energy generation. The sampling frame includes 48 metropolitan statistical areas in the United States. The findings reveal five unique configurations that lead to the presence of a new paradigm within regions, and five different configurations that are associated with its absence.» [ABSTRACT FROM AUTHORS]


Regional Knowledge, Organizational Capabilities and the Emergence of the West German Laser Systems Industry, 1975–2005

By : Guido Buenstorf, Michael Fritsch and Luis F. Medrano. Regional Studies, Volume 49, Issue 1, Pages 59-75, 2015.

Abstract: « This paper analyses how the regional distribution of knowledge and pre-existing organizational capabilities shaped the spatial distribution of a new innovative industry, using the German laser systems industry as an empirical example. It is found that regional knowledge in the related field of laser source production and the presence of laser-relevant universities and public research organizations were conducive to the first emergence of laser systems producers. Upstream laser source producers influenced entry into the downstream laser systems industry primarily through their own diversification moves. Public research was less important in the submarket of materials processing laser systems, which is less directly science based than other parts of the laser systems industry.» [ABSTRACT FROM AUTHORS]


Clusters and industrial districts: where is the literature going? Identifying emerging sub-fields of research

By : Jose Luis Hervas Oliver, Gregorio Gonzalez and Pedro Caja. INGENIO WORKING PAPER SERIES, No 2014-09.

Abstract: « The industrial district and cluster literature has generated an extraordinary quantity of articles, debates, and topics for discussion, and encompasses one of the most vibrant lines of research in the field of economics, geography, management and related disciplines. The literature, however, is fairly fragmented. In this paper, bibliometric methods are used to analyze cluster literature published between 1957 and 2014 in order to explore prospective research priorities through the method of bibliographic coupling. Beyond focusing on foundational works in the past, this approach shifts the focus away from the practice of analyzing co-citations and seminal contributions to one of looking at current and emerging trends in the literature. Using the ISI-Web of Knowledge (Web of Science) as a database, examination of two samples of 3,955 and 2,419 articles is made. Results reveal the existence of sub-fields of inquiry that are following their own particular research agendas, which remain distinct yet interconnected to one another.» [ABSTRACT FROM AUTHORS]


Emergence of clusters: by chance or by design? The rise of the Oslo Cancer Cluster

By : Arne Isaksen. Paper for ERSA 54th Congress, Saint Petersburg.

Abstract: « The paper develops an analytical framework to explain the emergence of regional clusters. The framework consists first of some pre-existing conditions that have to be present if specific clusters are to evolve in some places. Secondly, it points at the need for triggering factors that cause clusters to emerge in just some particular places that have the necessary conditions, and factors that first of all stimulate entrepreneurship. The framework also distinguishes between pre-existing conditions and triggering factors at the micro, meso and macro level. The framework turns out to be a useful tool in order to explain the emergence of new entrepreneurial biotech firms in Oslo in the late 1990s and early 2000s, which makes up the rise of Oslo Cancer Cluster. Important pre-existing conditions in this case are the long-term creation of a regional R&D system specialised in cancer diagnostics and research in Oslo and latent entrepreneurs. Triggering events are in particular national regulatory changes and the inflow of new knowledge of commercialisation. The framework is highly relevant for small, science based clusters as Oslo Cancer Cluster, however, it is in principle also applicable to other types of regional clusters.» [ABSTRACT FROM AUTHOR]


The Role of Entry and Market Selection for the Dynamics of Regional Diversity and Specialization

By : Florian Noseleit. Regional Studies, Volume 49, Issue 1, Pages 76-94, 2015.

Abstract: « Despite predictions that economic integration leads to increasing specialization, the opposite development has been observed at the regional level. Based on nearly three decades of West German data, this paper addresses the diversification of regional economic activity and emphasizes the role of industry dynamics, specifically newly entering business cohorts. Although a strong sectoral specialization evolves in the entry cohorts within and between regions over time, entries substantially increase the overall diversity of regions. Market selection favoured less similar entries in comparison with the initial industry structure and, thus, allowed regional diversity to increase. Overall, the regional specialization processes within each entry cohort did not become less important; however, the fields of regional specialization changed continuously over time, resulting in more diversity.» [ABSTRACT FROM AUTHORS]


Regional financial development and foreign direct investment

By : Yanjing Chen, Yu Gao, Ying Ge and Juan Li. Urban Studies, Volume 52, Issue 2, Pages 358-373, 2015.

Abstract: « In this paper, we examine the link between regional financial development and foreign direct investment using a large micro-level dataset of Chinese manufacturing enterprises. We first investigate the effect of regional financial development on foreign direct investment location choices, and find such development to significantly promote foreign direct investment. We then show that regional financial development also plays an important role in foreign direct investment productivity spillovers. Domestic firms located in financially developed regions gain positive knowledge spillovers from foreign direct investment, but the competitive pressure from multinationals exerts a negative influence on the productivity of domestic firms.» [ABSTRACT FROM AUTHORS]