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.

Firm Productivity and Agglomeration Economies: Evidence from Egyptian Data

By: K. Badr, R. Rizk, C. Zaki. Economic Research Forum, Working Paper No. 1239, 2018.

Abstract: “This paper attempts to shed light on the nexus between firm productivity and economies of agglomeration in Egypt. Using a large dataset of 62,108 firms in 342 four-digit activities in 27 regions governorates, we introduce three measures of agglomeration, which are urbanization or firm diversification, measured by the number of firms in the governorate, localization and specialization, measured by the average productivity in the governorate and sector (generating externalities and knowledge spillovers), and finally competition, measured by the number of firm operating in the same governorate and the same sector. We find strong evidence for the existence of agglomeration economies in Egypt after controlling for firm age, location, economic activity and legal status. In the Egyptian context, productivity spillovers gained from agglomeration economies outweighed the negative effects of congestion implied by our competition measure. The latter is chiefly due to the lack of good infrastructure. When regressions are run by firm size and activity, our main findings show, first, that micro and small firms are more likely to benefit from localization and diversification compared to medium and large firms. Finally, service firms benefit more from a high level of diversification, while manufacturing firms gain more from knowledge spillovers and specialization. Our results support promoting entrepreneurship through the creation of industrial clusters located outside Cairo to lessen disparities between regions and acquire the full advantages of agglomeration. “[ABSTRACT FROM AUTHORS]

Linking Content and Technology: On the Geography of Innovation Networks in the Bergen Media Cluster

By: R. Martin, J. O. Rypestøl. Lund University, CIRCLE, Papers in Innovation Studies, Paper No. 2019/01, 2019.

Abstract: “This paper deals with the geography of innovation networks and analyses combinatorial knowledge dynamics from a single cluster perspective. Addressing firms in the media cluster in Bergen, Norway, we examine how and from where companies acquire and combine different types of knowledge for their innovation activities. The empirical analysis, which is based on structured interviews with 22 media companies, identifies two main types of cluster firms: media content providers that rely heavily on symbolic knowledge and media technology providers that draw mostly on synthetic knowledge. Even though they draw on different knowledge bases, the two types of firms are strongly interlinked in their innovation activities and source knowledge from each other. Furthermore, we find that synthetic firms constitute a gateway to the regional R&D system and that the region acts as key arena for the combination of dissimilar knowledge bases.” [ABSTRACT FROM AUTHORS]

How did Regional Economic Structures in the EU Change during the Economic Crisis?

By: M. Stierle, U. Stierle-von Schütz, S. Rocher. European Commission, Discussion Paper No. 088, ISSN 2443-8022, 2018.

Abstract: “10 years on, many countries and regions in the EU still bear the scars of the 2008/2009 financial crisis. Countries and regions have recovered at different rates and undergone different structural changes. While the asymmetric impact of the crisis across regions and sectors has had a short-term impact on concentration and specialisation patterns; long-term forces, such as global economic and supply chain integration, continue to shape the economic landscape of European regions. In our empirical analysis, we describe the development of regional economic structures in terms of sectoral employment and production (gross value added) during the crisis. We focus on the location pattern of sectors (concentration), i.e. in which regions economic activities in a sector tend to be located, and the specialisation of regions, i.e. which sectors are particularly important in a region. Our analysis shows that the impact of the crisis on overall specialisation patterns appears rather limited, although some regions have been more affected than others. In addition, the general trend of sectoral location patterns in the EU becoming more similar over time has continued, albeit at a slower pace since 2009, especially in Central and East European Countries. In terms of sectors, employment and production concentration in the construction and manufacturing sectors, which displayed clustering before the crisis, have been dispersing since 2009. The data also show that regions with large employment losses during the crisis were mainly specialised in agriculture, low-tech manufacturing, construction and less-skilled services such as trade, accommodation/restaurants and transport. This suggests that local economic structures may have played a role in the economic resilience of regions during the crisis.” [ABSTRACT FROM AUTHORS]

New Forms of Partnership: The Role of Logistics Clusters in facilitating Horizontal Collaboration Mechanisms

By: Y. Sheffi, M. Jesus Saenz, L. Rivera, D. Gligor. European Planning Studies, DOI: 10.1080/09654313.2019.1575797, 2019.

Abstract: “Although the benefits of horizontal collaboration have been well documented in the literature, research has yet to offer a detailed understanding of the mechanisms that firms employ to create successful horizontal collaboration. Further, the role of logistics clusters in facilitating horizontal collaboration is crucial but not clear yet. This paper addresses these gaps. In order to address the research objectives, we employ a systematic literature review methodology. As a result of this process, one hundred thirty-three (133) papers published in leading academic journals were systematically analyzed. These studies are reviewed under the theoretical lenses of the transaction cost economics (TCE) and the derived identification of governance mechanisms (i.e. joint value propositions, informal governance, formal governance and information exchange) to achieve successful horizontal collaboration. Further, we provide a detailed description of how logistics clusters can facilitate and promote the development of such mechanisms, illustrated with companies’ best practices. As a result, several testable research propositions are put forth.” [ABSTRACT FROM AUTHORS]

Straining but not Thriving: Understanding Network Dynamics in Underperforming Industrial Clusters

By: E. Giuliani, P.-A. Balland, A. Matta. Journal of Economic Geography, Vol. 19, Iss. 1, pp. 147–172, 2019.

Abstract: “We investigate the micro-connectivity drivers of network change in an underperforming industrial cluster in Argentina. Our analysis is based on data collected in two consecutive surveys, conducted in 2005 and 2012, of entrepreneurs in the electronics cluster in Córdoba. We find that social and institutional factors influence micro-connectivity choices at the local level, while firms that are more open to non-local knowledge have the tendency to behave like external stars, potentially limiting the flow of non-locally generated knowledge into the cluster network as it grows. We interpret these results using the intuitions from strain theory and suggest that strain may engender an ‘everyone for themselves’ mentality in the most open cluster firms as they seek to escape from a condition of underperformance. We posit, also, that local social and institutional ties are relevant for most cluster firms to survive but are not sufficient for the cluster to thrive.” [ABSTRACT FROM AUTHORS]

Performance Evaluation to support European Regional Development – A University–Industry Perspective

By: T. Rantala, J. Ukko. European Planning Studies, DOI: 10.1080/09654313.2019.1581728, 2019.

Abstract: “Regional-level innovation policies and development activities, which are not only technology oriented but that also address intellectual issues, knowledge and absorptive capacity enhancement as sources of innovation and economic growth, are posing challenges regarding their management. One of the main challenges that arises with these new types of regional- level development activities relates to their evaluation because insufficient attention is paid to the design and building of the current evaluation frameworks suggested for the context of regional development. This study presents a framework to design and build a performance evaluation system to support the performance measurement of regional development activities. Utilizing operational-level development activities as an empirical example, this study aims to improve the understanding of performance evaluation in university–industry collaborations in the context of regional development. The presented framework highlights the role of evaluation as part of the learning process in regional development activities between universities and industrial and public-sector organizations. The results of the study show that it is also possible to use the evaluation system to increase understanding of the interplay between operational level development activities and regional development programmes.” [ABSTRACT FROM AUTHORS]

Choose the Neighbor before the House: Agglomeration Externalities in a UK Science Park

By: C. Helmers. Journal of Economic Geography, Vol. 19, Iss. 1, pp. 31–55, 2019.

Abstract: “This article investigates the presence of agglomeration externalities and their effect on innovative activity of companies located in a science park in the UK. We analyze whether close geographical, industrial and technological proximity of firms located in a science park increases firm-level innovative activity measured as patenting. The results provide evidence for the presence of positive inter- and intra-industry knowledge spillovers among firms that are located in very close geographic proximity. The results suggest that knowledge spillovers decay rapidly with geographic distance even within small clusters of firms such as a science park.” [ABSTRACT FROM AUTHOR]

Innovation in Times of Financialization: Do Future-oriented Innovation Strategies suffer? Examples from German Industry

By: K. Hahn. Research Policy, Vol. 48, Iss. 4, pp. 923-935, 2019.

Abstract: “Shareholder value, short-term strategies, quarterly financial reports, and performance-based remuneration are strong indicators of a financial market-oriented company. It is questionable whether innovativeness and sustainable innovation capabilities can be maintained in times of financialization focused on short-term efficiency instead of free space for creativity and learning. Using the example of established German industrial companies, I examined the extent to which financialization and financial market actors steer innovation strategies and practices. In-depth interviews with companies, cluster managers and banks and reviews of financing data do not reveal a direct influence of financial investors on innovation activities. On the contrary, companies’ managements still have the power to decide how much financial control and standardization they allow for their companies’ innovation practices. The pressure on these German companies to innovate comes from their strong market orientation rather than from financialization.” [ABSTRACT FROM AUTHOR]