This monthly selection of articles is been carried out by Philippe Gugler and Basile de Raemy, 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.

Footwear cluster’s decline in the South of Brazil: the  transformation of a supercluster

By J. Ruffoni, R. de Castro Garcia, A. Roehrig. Competitiveness Review, DOI: 10.1108/CR-11-2021-0157, August 2022.

Abstract: “Purpose – This paper presents an empirical contribution to the literature on cluster evolution, highlighting the decline phase. The analysis focuses on the footwear sector in Rio Grande do Sul (RS) state, in southern Brazil, where an important footwear cluster is located, which was once considered one of the world’s largest footwear clusters. The purpose of this study is to analyse the transformation of this footwear industrial sector since the beginning of the 2000s using several sectoral statistics. Design/methodology/approach – This paper presents an empirical and longitudinal study that comprises the sourcing of 20 years of secondary data, based on official sources. The main data analysed were production, price, industrial structure, labour market and foreign market. Findings – The main results indicated a significant reduction in production, export and employment. In addition, a precarization of the labour market was observed, with lower wage levels, even with an increase in the formal qualification of labour over time. The finding is that the RS footwear sector underwent a huge structural change and lost the status of a worldwide supercluster. This decline occurred due to two central factors: an external shock related to China’s entry into the international and Brazilian domestic markets, accompanied by a slowdown in the Brazilian economy since 2015; and the difficulty of local firms responding to the new challenges. Research  limitations/implications – Synthesizing the findings, it is understood that this paper contributes to registering the trajectory of decline over time of the footwear sector in RS. In this sector, the Sinos Valley cluster is located, historically known as a footwear producing and exporting supercluster. This cluster loses the characteristic of a “supercluster”, but it still remains an important footwear cluster in Brazil. Therefore, this study reinforces the existence of fragilities already pointed out by the literature in Schimtz (1999) and, more recently, in Schmidt (2020). The need to address a set of fragilities remains current, both at the micro- and meso-levels. This is key to reversing the decline trajectory of the cluster and the sector. Moreover, as recent studies on clusters point out, one still must think about the impact of another ongoing paradigmatic transformation concerning the use and development of Industry 4.0 technologies. Thus, the central challenge is to think about and implement new public and private policies. The historical, economic and social relevance of the sector and the cluster demand efforts to reverse the decline. Originality/value – This study focuses to contribute to the discussion about the decline of the footwear production in the region by analysing secondary data regarding the industrial sector. This is an analysis at the meso-level (industry). The authors understand that the originality of the research lies in the longitudinal analysis for a recent period (past 20 years) that captures the greatest current crisis experienced by the region.” [ABSTRACT FROM AUTHORS]

Effect of cluster initiatives and  natural clusters on business performance

By: M. Zizka, E. Stichhauerova. Competitiveness Review, DOI: 10.1108/CR-02-2022-0021, August 2022.

Abstract: “Purpose – This study aims to determine how much company participation in a type of cluster affects its economic performance. Design/methodology/approach – This study includes companies operating in seven industries (automotive, engineering, textiles, information technology (IT) services, furniture, packaging and nanotechnology) in the Czech Republic. The companies are divided into three groups: members of institutionalized cluster, operating in the same region (natural clusters) and operating in other regions. Data envelopment window analysis is used to measure their performance for 2009–2019. Findings – Results show that the effect of clustering differs among industries. Companies in three industries (automotive, engineering, nanotechnology) reveal a positive impact of the cluster initiative on performance growth. Two industries (textile, packaging) with companies operating in a natural cluster show better performance than those in an institutionalized cluster. Moreover, the IT services and the furniture industries show no positive effect of clustering on corporate performance. Research  limitations/implications – This research includes 686 companies from seven industries and monitored for 11 years. On the one hand, the sample includes a relatively high number of companies overall; but on the other hand, the sample is relatively small, especially for nonclustered companies. The reason is the lack of available financial statements for small companies. Practical implications – From the perspective of practical cluster policy, the authors can recommend that monitoring the performance of member companies in clusters must be one of the criteria for evaluating the success of a cluster, such as cluster initiatives. Originality/value – This study distinguishes between long-standing natural clusters in a given industry and institutionalized ones that have emerged because of a top-down initiative. An original database is created for clustered and nonclustered companies in seven industries, covering the entire Czech Republic.” [ABSTRACT FROM AUTHORS]

Opening the path of gastro-tourism  cluster development: the case of Cyprus

By: Z. Garanti, C. Stylianou. Worldwide Hospitality and Tourism Themes, DOI: 10.1108/WHATT-07-2022-0076, August 2022.

Abstract: “Purpose - This study aims to identify stakeholders and dimensions of the gastro-tourism cluster in Cyprus in order to facilitate the creation of a network of unique culinary experiences for tourists. Design/methodology/approach - The qualitative research approach was undertaken through interaction with academics, researchers, and public and private sector stakeholders during the Gastro-Tourism Conference, which was organized by the University of Nicosia, Cyprus, in May 2022. The study draws on data from non-structured interviews conducted with tourism industry professionals and stakeholders. Findings - Four stakeholders of the gastro-tourism cluster were identified: enterprises from the gastro sector, supportive enterprises and industries, public institutions, and other institutions. Geographic proximity and knowledge sharing are the main dimensions affecting the gastro-tourism cluster in Cyprus. Originality/value - The authors identified stakeholders in and dimensions of the gastro-tourism cluster in Cyprus, each of which plays a significant role in creating culinary experiences for visitors and ensuring more sustainable and less seasonal development of the island as a destination.” [ABSTRACT FROM AUTHORS]

Impact of knowledge absorptive  capacity on innovative performance in SMEs: mediating effect of cluster  environment

By: B. E. Fulgence, X. Hu, O. Larbi-Siaw, S. J. Tuo, F. E. Gnahe. Kybernetes, DOI: 10.1108/K-03-2022-0373, August 2022.

Abstract: “Purpose - This study builds on knowledge-based view (KBV) research and the natural resource-based view of the firm (NRBV) to examine the effect of knowledge absorptive capacity on innovative performance. It also investigates the mediating role of three dimensions of the cluster environment: degree of network, institutional environment and access to factors of production. Design/methodology/approach - By means of partial least squares-based structural equation modelling method, the study validated and analysed the responses of 503 owners and managers of small and medium-sized enterprises (SMEs) in the wood industrial cluster of Cote d'Ivoire, a developing economy. Findings  - The analysis and results reveal that knowledge absorptive capacity strongly predicts cluster environment and innovation performance. Moreover, the cluster environment emerged as a powerful determinant of innovation performance and a mediator of the effect of knowledge absorptive capacity on innovation performance. Unequivocally, institutional support has no significant impact on knowledge absorptive capacity (KAC) and innovative performance mediation relationship and is not a key determinant of innovative performance. Originality/value - This study offers a key departure from past studies by linking knowledge absorptive capacity to innovative performance and the cluster environment in SMEs. It also extends knowledge concerning the role of KBV, NRBV and relational theory in innovation performance.” [ABSTRACT FROM AUTHORS]

Development zones and firms’  performance: the impact of development zones on firms’ performance for a  Chinese industrial cluster

By: Y. Liu, Y. Wu, X. Zhu. Regional Studies, DOI: 10.1080/00343404.2022.2107192, September 2022.

Abstract: “This paper examines the policy effect of development zones on firms’ performance, excluding the agglomeration effect. We constructed an industrial cluster dataset on China’s manufacturing industries to identify the impacts on firms’ productivity and other performance indices after the establishment of development zones in 2006. Based on the estimated results obtained from a difference-in-differences analysis, development zones are conducive to promoting firms’ performance, and the policy effect is heterogeneous across industrial clusters, regions and firms. The findings drawn from this study can be beneficial to policymakers in their pursuit of promoting regional development through favourable industrial policies.” [ABSTRACT FROM AUTHORS]

Boundary spanners and the external market reach of clusters:  the case of the Jingdezhen ceramics cluster in China

By: D. Wu, N. M. Coe. Regional Studies, DOI: 10.1080/00343404.2022.2110229, September 2022.

Abstract: “Extra-local linkages are increasingly understood as key drivers of cluster development. The literature, however, tends to be overwhelmingly concerned with global production and knowledge linkages, paying insufficient attention to extra-local market linkages. To address this research lacuna, through a case study of the Jingdezhen ceramics cluster in China, the paper investigates the ‘market reach’ process to unpack how diverse individual actors, conceptualized as ‘boundary spanners’, have enabled this cluster to forge extra-local market linkages. More specifically, it identifies three market reach mechanisms, namely: convening quasi-permanent clusters locally, facilitating participation in external temporary clusters and establishing one-to-one market relationships.” [ABSTRACT FROM AUTHORS]

The rise and fall of industrial clusters: experience form  the resilient transformation in South Korea

By: D. Kim, S. Kim, J. S. Lee. The Annals of Regional Science, DOI: 10.1007/s00168-022-01170-6, August 2022.

Abstract: “Clusters facing a crisis could have devastating effects on the economic conditions of the regions. Therefore, it is important to study how resilience works in the lives of clusters. The purpose of the current study is to more quantitatively understand the life path of the growth and decline of industrial clusters by verifying actual patterns. Also, it is to explain why these patterns were formed by qualitatively analyzing the process of utilizing resilience. The main contribution to the field of the lifecycle of clusters would be proving the theoretical concepts with data of the entire official industrial clusters in South Korea for 2 decades. Although previous works have attempted to define life paths by classifying the groups, most of their cases only dealt with one or two cases, making it difficult to generalize to a theory that can explain all types of clusters. This research used South Korean data as representative data for classification by analyzing the 1375 industrial clusters for 20 years. The trend of their life paths was calculated using a classic time-series decomposition method, and dynamic time series warping was adopted to measure the similarity between the paths. The k-medoids method from an unsupervised machine learning technique was adopted to classify the data. They were classified into three types: Malmo-type, Silicon Valley-type, and Detroit-type. The same classification method can be applied to other countries. Through this classification, the necessary or weak determinants of resilience in their clusters can be found. By making up for these shortcomings, continuous growth can be achieved.” [ABSTRACT FROM AUTHORS]

Structural change and agency in  territorial development: the case of mature industrial districts

By: M. Bellandi, D. Storai. Regional Studies, DOI: 10.1080/00343404.2022.2107190, September 2022.

Abstract: “This paper focuses on combinations of structural and agency conditions in mature industrial districts that face contemporary challenges potentially disrupting their traditional paths. These districts need to adopt new forms and paths of territorial development. Specifically, we aim to enhance the comprehension of combinations that either support or hinder rerouting to new forms and paths. We propose a conceptual framework of structural change, inner heterogeneity and agency that builds on related streams of regional and territorial development studies. We apply it to a contemporary Italian industrial district. Finally, some suggestions regarding the strategic actors involved in good territorial governance emerge.” [ABSTRACT FROM AUTHORS]

Entrepreneurial ecosystems and  industry knowledge: does the winning region take all?

By: Y. Li, M. Kenney, D. Patton, A. Song. Small Business Economy, DOI: 10.1007/s11187-022-00681-y, September 2022.

Abstract: “Entrepreneurial ecosystems (EE) are composed not only of startups but also the organizations that support them. Theory has been ambivalent about whether an EE is spatially bounded or includes distant organizations. This exploratory study uses a time series of all Internet industry initial public offerings (IPO) to explore the locational changes not only of startups but also four key EE service providers: lawyers, investment bankers, venture capitalists, and board directors. We find that while the startups became only slightly more concentrated, the EE service providers concentrated more rapidly, as an industry center in Silicon Valley emerged. Our results suggest that over the industry life cycle, industry knowledge exhibits a tendency to spatially concentrate, and this results in a concentration of industry-specific EE service providers that is even greater than the more gradual concentration of startups. As a result, startups, wherever they are located, increasingly source EE services from the industrial knowledge concentration.” [ABSTRACT FROM AUTHORS]