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.

Does the Position in the Inter-sectoral Knowledge Space affect the International Competitiveness of Industries?

By: F. Lamperti, F. Malerba, R. Mavilia, G. Tripodi. LEM Working Paper Series, ISSN: 2284-0400, 2019.

Abstract: “This paper empirically investigates how the inter-sectoral knowledge flows affect the international competitiveness of industries, once controlling for both cost and other technological factors. Using patent data on 14 manufacturing industries in 16 OECD countries over the period 1995-2009, we apply a network-based approach to capture the effect of industries’ position in the flows of technological knowledge across industries, which we label inter-sectoral knowledge space. We find that (i) centrality and local clustering in the inter-sectoral knowledge space positively affect the export market shares of an industry, (ii) such two effects are rather redundant and, (iii) national-level knowledge flows’ impacts on international competitiveness are way stronger than international ones. Network measures of position in the knowledge space are found to be more relevant than standard technological indicators such as patent counts. Our results point to the importance of industries being well located in the stream of knowledge flows, rather than being innovative per-se, and offers a novel yet robust proxy to measure technological factors affecting trade performances. In addition, we find evidence of geographical boundaries of knowledge flows.” [ABSTRACT FROM AUTHORS]

Place- Based Innovation Ecosystems

By: G. Rissola (ed.), J. Sörvik, A. Zingmark, M. Ardenfors. Publications Office of the European Union, ISSN: 1831-9424, 2019.

Abstract: “There is a revival in the automotive sector in West Sweden, whereby several new companies set around the vehicle industry are attracting fresh capital and expertise into the region. An increasingly dynamic entrepreneurial ecosystem is generating new innovation intermediaries who provide added-value functions. The emergence of these innovation intermediaries is being driven by political, market-related, socio-cultural, relational and technological factors. These include societal challenges and trends that drive political interest, such as environmental issues and climate change. There is also a political interest in adapting to globalisation, to secure regional competitiveness and resilience. New technology developments include the electrification of vehicles, automation and connected vehicles. This is driving an interest from industry and academia in attracting talent and securing competences. There is also a tradition and experience of collaboration in the region. Volvo Group (AB Volvo) and Volvo Cars are very interested in continuing to nurture the regional ecosystem, by attracting other companies to the region. Civil society is eventually involved in the innovation ecosystem as user of technology, where user behaviour is analysed as an input to development processes. A common view among respondents is that it should be the needs of the stakeholders to drive the setting-up of innovation support actors or collaborative projects. These initiatives should support not only single companies but also many actors in the system, and be conducive to collaborative activities.” [ABSTRACT FROM AUTHORS]

Chinese regional inequality and sectoral foreign direct investment

By: B. Azarhoushang, J. Pédussel Wu, S. Zaroki. Berlin School of Economics and Law, Institute for International Political Economy Berlin, Working Paper No. 119/2019, 2019.

Abstract: “Following the 1978 economic reforms, China gradually became first amongst developing countries and the second in the world, after the USA, in terms of stock of inward Foreign Direct Investment (FDI). Sustained GDP growth, a high rate of capital return and brisk economic development made China one of the best destinations for foreign capital; however, the benefits of this spectacular growth have not been evenly distributed throughout the various Chinese regions. There are many low-income and poor economic performing provinces in China although poverty is mainly concentrated in the inland regions. Since the beginning of the 2000s, a series of policies have been designed and implemented by the Chinese government to encourage foreign company investment in central and western provinces to help decrease the regional inequality with limited successes. This paper uses Panel Least Squares method to empirically analyze the impact of industrial sector FDI on Chinese regional inequality during 2003-2013. The resulting analysis shows the connection between FDI in industrial sectors and regional inequality in China. In particular, regional inequality affects FDI location choices. The findings show that economic and non- economic indicators such as human capital, infrastructure, per capita income, and government policies affect regional inequality and foreign firms’ location choices. Despite government policies to support inland regional economic development, foreign firms still prefer to invest in coastal provinces further illustrating the effects of clusters in this region.” [ABSTRACT FROM AUTHORS]

Technological regimes and the geography of innovation: a long-run perspective on US inventions

By: D. Diodato, A. Morrison. Utrecht University, Human Geography and Planning, Papers in Evolutionary Economic Geography No. 19.24, 2019.

Abstract: “The geographical distribution of innovative activities is an emerging subject, but still poorly understood. While previous efforts highlighted that different technologies exhibit different spatial patterns, in this paper we analyse the geography of innovation in the very long run. Using a US patent dataset geocoded for the years 1836-2010, we observe that – while it is true that differences in technologies are strong determinant of spatial patterns – changes within a technology over time is at least as important. In particular, we find that regional entry follows the technology life cycle. Subsequently, innovation becomes less geographical concentrated in the first half of the life cycle, to then re-concentrate in the second half.” [ABSTRACT FROM AUTHORS]

Rethinking clusters. Towards a new research agenda for cluster research

By: L. Lazzeretti, F. Capone, A. Caloffia, S. R. Sedita. European Planning Studies, DOI:https://doi.org/10.1080/09654313.2019.1650899, 2019.

Abstract: “Notwithstanding the wide research on clusters and industrial districts, most of the preceding contributions tried to analyse and investigate past research and rarely tried to critique or propose any future trajectories of this stream of research. The aim of this special issue is to identify and discuss the main themes of research that populate the current scientific debate and highlight the emergent lines that may well set the future research agenda. In order to provide a scenario for better understanding the content of this special issue, in this work, we encouraged a mix of quantitative and qualitative approaches. In particular, to identify the most important themes of current and future research, we present a bibliometric analysis of the papers that were presented at the international workshop ‘Rethinking Clusters’, which took place in Florence in 2018, with more than 100 participants. This exercise together with a wider literature review permits us to propose a new research agenda on cluster research according to eight main themes. These range from cluster life cycles, through creativity, innovation, knowledge networks, cluster policy issues, internationalization, sustainability, finally to cluster variety and relatedness.” [ABSTRACT FROM AUTHORS]

Six critical questions about smart specialization

By: R. Hassink, H. Gong. European Planning Studies, DOI: 10.1080/09654313.2019.1650898, 2019.

Abstract: “During the last five years, we can observe a soaring academic interest in the concept of smart specialization. A burgeoning literature emerged both conceptually and empirically. In this paper, we pause for a while and take stock of six critiques so far identified in this emerging literature. The aim is to provide a critical lens for future research on smart specialization strategies and processes. We argue that: (1) Smart specialization is a confusing concept, as what it really means is diversification; (2) It is largely predicated on a conventional science and technology (S&T) model of innovation and regional economic development, whereas socio-ecological innovation and social innovation, have only been implicitly mentioned, at best; (3) It is the continuation of cluster policies, rather than a brand-new policy instrument; (4) It contains a delusional transformative hope, although the entrepreneurial discovery process could very likely lead to lock- ins; (5) Structurally weak regions might be less likely to benefit from smart specialization; and 6) more rigorous measurements of smart specialization are still needed. By engaging systematically with these six issues, we not only aim to improve the effects of smart specialization as a policy programme, but also to contribute to its conceptual advancement.” [ABSTRACT FROM AUTHORS]

Business districts: the spatial characteristics of FDI within cities

By: M. van't Hoff, R. Wall. European Planning Studies, DOI: 10.1080/09654313.2019.1651830, 2019.

Abstract: “Many studies focus on the competitive characteristics of cities – such as accessibility, infrastructure, knowledge, creativity, institutions, face-to-face-contacts, tacit knowledge, and business interaction – and how these attract FDI, firms, and people. However, few studies focus on the spatial characteristics of urban clusters. In this study, knowledge-intensive FDI into 15 Northwestern European cities was explored. The FDI was geo- mapped at a district level, and the characteristics of these districts regarding proximity, functionality, urbanity and spatial quality were classified. The results revealed the spatial indicators that attract FDI in knowledge-intensive industrial activities.” [ABSTRACT FROM AUTHORS]

Regional competitiveness for attracting and retaining foreign direct investment: a configurational analysis of Chinese provinces

By: L. Cui, D. Fan, Y. Li, Y. Choi. Regional Studies, DOI: 10.1080/00343404.2019.1636023, 2019.

Abstract: “This study examines the entry and exit of multinational enterprises (MNEs) across regions in China. It analyses the strategic entry and exit of MNEs in 31 Chinese provinces during the period 2001–07. The fuzzy-set qualitative comparative analysis (fsQCA) reveals multiple regional competitiveness profiles, as configurations of economic and institutional conditions, which are associated with a large scale of MNE entries and/or exits. It is found that while MNEs tend to exit regions with deficiencies in economic conditions, they are attracted to regions with favourable economic conditions and low state intervention, which also results in heightened market competition leading to the restructuring of foreign investors.” [ABSTRACT FROM AUTHORS]

What explains India’s poor performance in garments exports: evidence from five clusters?

By: S. Ray. ICRIER, MPRA Paper No. 95132, 2019.

Abstract: “In this paper, we examine the Indian apparel industry to examine the effect of clusters on the sales of this industry. The data has been collected through a primary survey in five garments clusters in India. The variable that is significant in explaining sales in most equations is technology proxied by imported machinery. It has been argued that inter-firm linkages and linkages between firms, service providers and institutions are crucial for competitiveness and this is best achieved through a cluster. Studies on clusters have shown that some clusters have been able to deepen their inter-firm division of labour, raise their competitiveness and break into international markets. Agglomeration may arise from the specialization of a region in a particular industry where firms share common inputs or knowledge. We argue that the main reason for India’s poor performance in garments (compared to other South Asian countries such as Bangladesh) is the lack of proper clusters. The development of the cluster in India has followed the ‘top down’ approach and the natural process through which linkages are developed are yet to occur in most clusters.” [ABSTRACT FROM AUTHOR]