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.

Clusters on the road to internationalization - evidence from an emerging economy

By: B. Jankowska, C. Główka. Competitiveness Review, Volume 26, Issue 4, 2016.

Abstract: “The paper is a response to the call for empirical research on cluster internationalization in order to learn more about the mechanism of cluster internationalization and the intensity of this process in a Polish context, which is specific due to Poland being an emerging market. We provide a conceptual model of cluster internationalization and show results of our own primary, empirical, quantitative research on cluster internationalization in Poland. The study reveals that Polish clusters are at the beginning of the internationalization process, particulary of the outward internationalization. The most popular mode of internationalization is exports. The level of Polish cluster internationalization operations is relatively low. The data were provided by cluster managers, but none of the cluster organizations had a reliable monitoring system for the international involvement of cluster members. These results are merely a snapshot; therefore a longitudinal study should also be carried out. The main value added of this paper consists in developing the conceptual model of cluster internationalization and applying the model in empirical research on the internationalization of Polish clusters. The study bridges the theory of firm internationalization, especially the approaches to firm internationalization with the theory of clusters. It offers insight into internationalization of clusters in Poland.” [ABSTRACT FROM AUTHORS]

City clusters and break-out in corporate competitiveness: Patterns and perspectives focusing on innovation capabilities and India

By: K. S. Momaya. Competitiveness Review, Volume 26, Issue 4, 2016.

Abstract: “The purpose of this paper is to analyze the patterns of location of key activities for break-out in corporate competitiveness. The key objective is to identify linkages that may exist among the location of corporate center activities, innovation capabilities and the break-out. Patterns of location of corporate center across the world have been explored first, using sample data from Global 500. For the context of innovation and India, two polar locations were selected. The patterns in the growth of focal firms from the locations were evaluated using select competitiveness criteria such as revenues, profits and assets, based on data of a larger sample from Global 2000. Findings support the view on ‘role of location with innovation clusters’ such as Bangalore, particularly for competitiveness of born global firms. Surprisingly, Mumbai has increased its percentage share of contributions in terms of revenues and profits, indicating sustenance of cluster, entrepreneurial and other advantages. Considering the enormous scope for enhancing contributions of EMNEs to the world economy, decisions related to break-out in competitiveness are critical. Depending on strategic intent and the role of innovation and internationalization, firms can take better decisions related to the location of specific corporate activities to foster MNE competitiveness. Analyzing the role of location of key corporate activities, for the phenomenon ‘break-out to higher stages of competitiveness’, is a unique contribution. These concepts and findings can be of high value to firms and MNEs thinking long term about location or relocation of corporate center activities, particularly for innovation. [ABSTRACT FROM AUTHOR]

Clustering or Co-Agglomeration? A Love-for-Variety Approach

By: N. Malykhin, P. Ushchev. National Research University – Higher School of Economics, Working Papers, WP BRP 140/EC/2016, 2016.

Abstract: “We develop a simple partial-equilibrium model of endogenous city structure formation. No production externalities are at work, the only two forces shaping the spatial configurations of the city being love for variety (on the consumer side) and seeking for a better access to the mar- ket (on the firm side). We show that, unlike in existing models of a similar nature, our model generates clustering rather than co-agglomeration. Namely, if there are few firms relative to the urban population size, then firms tend to cluster at the city center, while consumers choose to reside on the outskirts. Otherwise, the opposite holds. Although a continuum of equilibrium city structures may emerge, we show that all spatial equilibria are segregated. In addition, the market outcome features spatial price dispersion, even though our framework does not involve imperfect information and search costs on the consumer side.“ [ABSTRACT FROM AUTHORS]

Industrial Cluster Policy and Transaction Networks: Evidence from firm-level data in Japan

By: T. Okubo, T. Okazaki, E. Tomiura. The Research Institute of Economy, Trade and Industry, RIETI Discussion Paper Series 16-E-071, 2016.

Abstract: “Cluster policy is designed to facilitate inter-firm networking. We examine industrial clusters in Japan based on firm-level transaction data. Firms in clusters expand transaction networks at higher speeds, but do so significantly only with firms agglomerated in Tokyo and not with local firms within the same region. By disaggregating firms according to their main bank types, we find that cluster firms expanding networks are mainly financed by regional banks and not by banks with nationwide operations. This suggests the importance of intensive relationships with main banks for inter-firm network formation.” [ABSTRACT FROM AUTHORS]

Industry Clusters and Regional Economic Development in the Midwest

By: N. Amugeh, E. Van der Sluis. South Dakota State University, Department of Economics, 2016.

Abstract: “Industry clusters (ICs) are a popular strategy followed by state and local governments to achieve regional and local economic growth and development. We investigate the presence of ICs in Metropolitan Statistical Areas (MSAs) in the Midwest between 2000 and 2010, and the degree to which the ICs have contributed to economic growth. Results indicate that the manufacturing, retail trade, health care and social assistance, finance and insurance, wholesale trade and construction industries were the six most common industries with concentrations across the MSAs in the Midwest. Also, only few industries (manufacturing, construction, utilities and wholesale trade) consistently showed statistically significant connections with the economic growth variables considered, even though most industries considered correlate positively with the economic development indicators. Changes in control variables such as population density, unemployment rate and education have greater impacts on economic development than do the cluster variables. Our study supports the hypothesis that while the presence of an industry cluster contributes to economic development, changes in other variables, such as a reduction in unemployment rate, have relatively greater impacts. Thus, the IC approach may not necessarily be among the most preferred strategy to boost economic development in the Midwest.” [ABSTRACT FROM AUTHORS]

Firm performance in the periphery: on the relation between firm-internal knowledge and local knowledge spillovers

By: M. Grillitsch, M. Nilsson. Regional Studies, DOI: 10.1080/00343404.2016.1175554, 2016.

Abstract: “Firm performance in the periphery: on the relation between firm-internal knowledge and local knowledge spillovers. Regional Studies. One of the most established arguments in regional studies is that knowledge dynamics shape the geography of economic activities and, more specifically, that knowledge-intensive activities benefit from collocation due to knowledge spillovers, local buzz and access to labour. There are, however, competing arguments that knowledge- intensive firms also suffer from negative spillovers and are less dependent on local knowledge sources than often presumed. Using Swedish micro-data from 2005–11, this paper shows that firms with weak internal knowledge grow faster in knowledge-intensive regions. However, the growth difference disappears or is even reversed for knowledge- intensive firms.” [ABSTRACT FROM AUTHORS]

Innovation collaboration and appropriability by knowledge-intensive business services firms

By: M. Miozzo, P. H. -F. Lee, I. Miles. Research Policy, Volume 45, Issue 7, 2016.

Abstract: “We uncover a “paradox of formal appropriability mechanisms” in the case of knowledge-intensive business services (KIBS) firms. Despite evidence that KIBS firms do not typically consider formal appropriability mechanisms, such as patents, to be central mechanisms for capturing value from innovation, we show that they are nevertheless important for their innovation collaboration. Drawing on an original survey of publicly-traded UK and US KIBS firms, we find a significant positive association between the importance of innovation collaboration and the importance of formal appropriability mechanisms. We interrogate the evidence for clients, as they are the most important partners for innovation collaboration. We find that the importance of innovation collaboration with clients goes hand-in-hand with the importance of formal appropriability mechanisms, although a negative relation appears when firms assign very high importance to formal appropriability mechanisms. Thus, modest levels of emphasis on formal appropriability mechanisms may prevent conflicts over ownership of jointly developed knowledge assets and knowledge leakages, while also avoiding the possibly negative effects of overly strict controls by legal departments on innovation collaboration. As well as exploring formal appropriability mechanisms, we also investigate the relationship between contractual and strategic appropriability mechanisms and innovation collaboration for KIBS firms.” [ABSTRACT FROM AUTHORS]

High-tech development and spatial planning: comparing the Netherlands and Taiwan from an institutional perspective

By: W.-J. Huang, A. M. Fernández-Maldonado. European Planning Studies, DOI: 10.1080/09654313.2016.1187717, 2016.

Abstract: “High-tech development has been broadly accepted as a prominent matter of regional development policies and plans at the global level. Strategies to enhance it have evident implications for spatial planning policies, plans and visions. Consequently, careful attention should be paid to the role that spatial planning policies play in the national and regional efforts to advance high-tech development in a particular place. This study addresses the relationship between the spatial planning system and high-tech development, searching to explain the spatial implications resulting from this relationship. It approaches the topic by comparing high-tech development experiences in the Netherlands and Taiwan from an institutional perspective. Although both countries have used a range of spatial strategies for economic growth through high-tech development, the results show that their different institutional settings, power relations between different levels of government and conceptions of science park have led to the implementation of two very distinct spatial strategies, shaping different spatial patterns of high-tech development clustering in these two regions. The findings demonstrate the potential of the institutional approach to study international planning issues, and contribute to theories of high- tech development and spatial planning.” [ABSTRACT FROM AUTHORS]