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.

Structure and evolution of global cluster networks: evidence from the aerospace industry

By: E. Turkina, A. Van Assche, R. Kali. Journal of Economic Geography, Volume 16, Issue 6, 1 November 2016, pp. 1211–1234, 2017.

Abstract: “We use a new panel dataset to study the network of formal firm linkages within and across 52 aerospace clusters in North America and Europe. Our theoretical framework, built upon the knowledge-based cluster and global value chains literature, suggests that a reduction in spatial transaction costs has induced clusters to specialize in increasingly fine-grained value chain stages. This should cause the overall network to evolve from a geographically localized structure to a trans-local hierarchical structure that is stratified along value chain stages. Applying community structure detection techniques and organizing sub-networks by linkage type, we find empirical evidence in support of this proposition.” [ABSTRACT FROM AUTHORS]

Competitiveness and connectivity in design innovation: a study of Norwegian furniture industry

By: X. Qiu, M. Cano-Kollmann, R. Mudambi. Competitiveness Review, Vol. 27, Iss. 5, pp. 533-548, 2017.

Abstract: “The purpose of this paper is to explore how firms achieve competitiveness by implementing design-driven innovation. This paper is a detailed longitudinal analysis of the design innovation underpinning the Norwegian furniture industry. Using a data set spanning 40 years (1976-2015) of design patents by both Norwegian firms and inventors, the authors map the coinventor connectivity of the design-innovation clusters of Norway, both within the country and with foreign locations. Using network analysis, the authors find that most of the rise of co-inventor connectivity within Norwegian furniture industry’s design innovation is occurring within the country. More surprisingly, the leading firms and star inventors are less likely to collaborate internationally, i.e. they are characterized by greater innovative “lock-in”. The exploration of all the potential reasons for the “lock-in” in design innovation of the Norwegian furniture industry is beyond the scope of this paper. A particularly interesting avenue for future research would be to compare the coinventor connectivity of traditional sectors like furniture with more high technology sectors within Norway. By assessing a detailed and historical context of the evolution of Norwegian furniture industry, the paper provides a fairly comprehensive study of design innovation as a source of firms’ competitiveness, which has been rarely explored. The authors suggest that innovative “lock-in” may be more likely to arise in the traditional sectors of an economy and the forces may be particularly strong for those firms and individuals that have the highest domestic connectedness and status.” [ABSTRACT FROM AUTHORS]

Competitive funding in North Rhine-Westphalia: Advantages and drawbacks of a novel delivery system for cluster policies

By: M. Kiese, J. Kahl. Competitiveness Review, Vol. 27, Iss. 5, pp. 495-515, 2017.

Abstract: “This paper aims to examine a cluster-based strategy implemented in the German federal state of North Rhine-Westphalia under the 2007-2013 “Regional Competitiveness and Employment” programme. Departing from traditional discretionary approaches, a substantial share of the funds was now allocated on a competitive basis. The authors analyse the resulting distribution of funds across stakeholders and sub-regions and try to assess the pros and cons of this process, which constitutes a novel delivery system for cluster policies. Following a literature review, the paper applies two sets of regression models to explain the distribution of funds under the new policy delivery system. Interviews with stakeholders provide evidence on the efficacy and efficiency of the competitive funding process. The changes introduced in the 2007-2013 funding period benefit universities and research organisations, as well as intermediary organisations, whereas the private sector and especially small firms capture a rather small piece of the pie. Contrary to the “innovation paradox” hypothesis, structurally weak sub-regions did not lose out in state-wide funding contests. The presence of universities with an overall high volume of third-party funding is the key variable explaining the spatial distribution of funds. This interview evidence identifies the duration of the selection process and its administrative complexity as main weaknesses, which the authors attribute to bureaucratic rationality on different levels. This is the first analysis of a competitive funding scheme at the sub-national level, using the German federal state of North Rhine-Westphalia as a case study. It sheds light on the mechanisms of funding allocation in the 2007-2013 funding period of the European Union’s cohesion policy, which was reoriented towards supporting regional competitiveness and employment in response to the Lisbon Agenda. While competitive funding is still seen as mobilising regional stakeholders and improving the quality of projects and the selection process, these findings highlight administrative complexity as a main deficiency, which has partly been addressed in the 2014-2020 funding period.” [ABSTRACT FROM AUTHORS]

What Drives Spatial Clusters of Entrepreneurship in China? Evidence from Economic Census Data

By: L. Zheng, Z. Zhao. Institute of Labor Economics, IZA DP No. 11074, 2017.

Abstract: “Since Chinese government initiated economic reform in the late 1970s, entrepreneurship and private sectors have emerged gradually and played an increasingly important role in promoting economic growth. However, entrepreneurship is distributed unevenly in China. Using micro data from 2008 economic census and 2005 population census, this paper explains spatial clusters of entrepreneurship for both manufacturing and services. For both sectors, entrepreneurship (measured by new private firms) tends to emerge in places with more relevant upstream and downstream firms. Moreover, Chinitz’s (1961) theories are also supported for manufacturing: small upstream and downstream firms seem to be more important for manufacturing entrepreneurship. For both sectors, entrepreneurship is positively related to city size, the share of young adults and the elderly population, and foreign direct investment. More migrants are also found to promote service entrepreneurship. Our paper is the first to consider both manufacturing and service entrepreneurship in China and should be of interest to both local and national policymakers who plan to encourage entrepreneurship.” [ABSTRACT FROM AUTHORS]

Localized Knowledge Spillovers: Evidence from the Spatial Clustering of R&D Labs and Patent Citations

By: K. Buzard, G. A. Carlino, R. M. Hunt, J. K. Carr, T. E. Smith. Federal Reserve Bank of Philadelphia, Research Department, Working Paper No. 17-32, 2017.

Abstract: “Patent citations are a commonly used indicator of knowledge spillovers among inventors, while clusters of research and development labs are locations in which knowledge spillovers are particularly likely to occur. In this paper, we assign patents and citations to newly defined clusters of American R&D labs to capture the geographic extent of knowledge spillovers. Our tests show that the localization of knowledge spillovers, as measured via patent citations, is strongest at small spatial scales and diminishes rapidly with distance. On average, patents within a cluster are about three to six times more likely to cite an inventor in the same cluster than one in a control group. At the same time, the strength of knowledge spillovers varies widely between clusters. The results are robust to the specification of patent technological categories, the method of citation matching and alternate cluster definitions.” [ABSTRACT FROM AUTHORS]

Location Choices of Graduate Entrepreneurs

By: J. P. Larsson, K. Wennberg, J. Wiklund, M. Wright. The Ratio Institute, Working Paper No. 290, 2017.

Abstract: “We review complementary theoretical perspectives on location choices of university graduate entrepreneurs derived from the individual-opportunity nexus and local embeddedness perspectives on entrepreneurship. Analysis of the full population of 215,388 graduates from Swedish institutions of higher education between 2002 and 2006 provides support for both location choice perspectives. Overall, 63 % of graduate entrepreneurs start businesses locally in their region of graduation while 37 % start businesses elsewhere. The likelihood of starting locally is substantially higher in metropolitan regions, if the graduate was born locally or has university peer entrepreneurs and entrepreneurial family members in the region of graduation. Implications for theory and public policy are discussed.” [ABSTRACT FROM AUTHORS]

Radical innovation in Marshallian industrial districts

By: J.-L. Hervás-Oliver, J. Albors-Garrigos, S. Estelles-Miguel, C. Boronat-Moll. Regional Studies, DOI: 10.1080/00343404.2017.1390311, 2017.

Abstract: “Radical innovation is under-researched in the geography of innovation. In this paper, the focus is on understanding how radical innovations occur in Marshallian industrial districts (MIDs), a phenomenon mostly overlooked. Using an exploratory and in-depth longitudinal case study methodology in two European MIDs, this paper analyzes radical innovation in MIDs and finds that the introduction of technology-distant knowledge and new firms from different (to the focal) industries are both necessary mechanisms, but not sufficient. Access to leading incumbents’ networks, based on social norms, becomes a crucial social factor necessary for radical innovation to occur in MIDs.” [ABSTRACT FROM AUTHORS]

Improving productivity in New Zealand's economy

By: A. Barker. OECD Economics Department Working Papers No. 1419, 2017.

Abstract: “New Zealand ranks highly on most indicators of well-being, but incomes are below the OECD average due to low labour productivity. Low labour productivity is only partly explained by the industry composition of the NZ economy and is primarily a consequence of sustained low multi-factor productivity growth within industries, as well as weak investment. Economic geography is an important factor in New Zealand’s poor productivity performance, as the small size and remoteness of the economy diminish its access to global markets, the scale and efficiency of domestic businesses, the level of competition, and the ability to benefit from innovation at the global frontier. Policy and institutions are generally supportive of productivity growth, but there are a number of areas where there is scope for reforms that would help offset the country’s geographical disadvantages and improve the welfare of New Zealanders over the coming decades. This includes promoting international connections, removing barriers to fixed capital investment (including taxation), accessing benefits from agglomeration by improving urban planning and infrastructure provision, enhancing competition and increasing investment in innovation and intangibles.” [ABSTRACT FROM AUTHOR]

A Long-Run Perspective on the Spatial Concentration of Manufacturing Industries in the United States

By: N. Crafts, A. Klein. University of Kent, School of Economics, KDPE Discussion Papers No. 1715, 2017.

Abstract: “We construct spatially-weighted indices of the geographic concentration of U.S. manufacturing industries during the period 1880 to 1997 using data from the Census of Manufactures and Bureau of Labor Statistics. Several important new results emerge from this exercise. First, we find that average spatial concentration was much lower in the late 20th- than in the late 19th- century and that this was the outcome of a continuing reduction over time. Second, the persistent tendency to greater spatial dispersion was characteristic of most manufacturing industries. Third, even so, economically and statistically significant spatial concentration was pervasive throughout this period.” [ABSTRACT FROM AUTHORS]

Emerging challenges of an urban creative economy: reflections on the governance of creative clusters in Taipei City

By: C.-Y. Lin. European Planning Studies, DOI: 10.1080/09654313.2017.1392489, 2017.

Abstract: “Retaining the global mobile creative class has been considered a crucial strategy for driving creative economic development in inner cities. However, implementing the global creative city strategy overemphasizes the significance of amenity-based creative economic landscapes over institutional collaborations in contributing to the situated governance dynamics of creative clusters. Drawing on insights from an evolutionary perspective, this paper scrutinizes the extent to which creative city strategies foster the situated development of creative clusters based on a case study of Taipei. The paper argues that developing the urban creative economy requires a context-specific understanding of the urbanization process, and should involve an institutional collaboration to articulate the socio-spatial co-evolution between the diversified dynamics of creative clusters and urban form. This paper advocates reflexive thinking on neoliberal city strategies to develop a conjunctive, diverse and substantial creative policy to support alternative paths of creative city development.” [ABSTRACT FROM AUTHOR]