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.

Shared Value clusters in Austria

By: P. Collazzo Yelpo. Competitiveness Review, Vol. 29, Iss. 1, pp. 61-76, 2019.

Abstract: “ This study aims to contribute to fill in the gap identified in the literature at the interplay of clusters and shared value creation (CSV), by mapping out and assessing CSV clusters in Austria. An exploratory, cross-sectional and multiple case study research with data generated through semi-structured interviews carried out with a sample of Austrian cluster managers. The collected data were assessed through a qualitative content analysis following Mayring (2010). The analysis of the data suggests that there are five main categories that shape Austrian clusters’ CSV practices, namely, cluster context, cluster purpose, CSV context, development of CSV and types of CSV. Applying Mayring’s content analysis technique to the proposed CSV cluster definition results in one third of the networks labeled as CSV clusters. The lack of a clear understanding of CSV and its strategic value emerged as a barrier for Austrian clusters to further embed shared value in their operations. This cross-sectional, exploratory study adds empirical evidence to the theoretical appeal of the CSV construct. Being CSV firm-specific and context-dependent, the relevance of the findings is limited to the current state of play of Austrian clusters. The cases revealed the opportunity to reinforce the message on the business case for CSV. By raising CSV awareness, social value creation is likely to increase. This paper aimed at contributing to the buildup of empirical evidence on shared value creation. Deviating from the mainstream literature that typically portrays multinationals as CSV champions, this research looks at clusters as unit of analysis.“ [ABSTRACT FROM AUTHOR]

Creating shared value and clusters: The case of an Italian cluster initiative in food waste prevention

By: F. G. Alberti, F. Belfanti. Competitiveness Review, Vol. 29, Iss. 1, pp. 39-60, 2019.

Abstract: “The purpose of this paper is twofold. First, it aims at reconciling the literature on creating shared value (CSV) with the one on cluster development, searching for complementarities and similarities. Second, it aims at understanding the role of cluster development in CSV. For these reasons, the authors operationalized the general idea of cluster development with the widely accepted concept of cluster initiatives, i.e. systematic efforts aimed at cluster development. The authors focused on exploring the process of launching and supporting local cluster initiatives through empirical evidence. In particular, the authors aimed at analyzing how a CSV strategy can be defined and developed when adopted within a cluster initiative. The research draws on a critical review of the literature focusing on CSV and on a conceptual reconciliation between the literature on the CSV ecosystem with the one on clusters, and more specifically on those initial cluster initiatives. The authors relied on an exploratory case study of an Italian cluster initiative in CSV, i.e. the Science and Innovation Food District (SIFooD) cluster promoted by Whirlpool. Thanks to the richness and great availability of information about the case, this study primarily relied on the use of secondary data. The case of SIFooD has highlighted how Whirlpool promoted the cluster initiative within its CSV framework to achieve sustainable and collaborative innovation in food waste prevention and, conversely, how SIFooD enhanced CSV of its cluster members. To arrange its network development process, SIFooD has implemented all the elements that prior literature has considered fundamental for launching and supporting a successful cluster initiative. On the other hand, SIFooD was able to adopt a collective-impact approach, implementing the five elements needed in its ecosystem to create shared value. Moreover, thanks to all the activities comprised in the SIFooD cluster initiative, shared value was actually created. The present paper has some limitations. First of all, the empirical analysis focuses only on one cluster initiative; thus, cross/comparative analyses with other cluster initiatives may illuminate the findings better. Second, the authors relied on a very recent cluster initiative in a particular field (food waste prevention) and in one specific institutional context (Italy); thus, data may suffer from temporal, industrial and geographical biases. Literature on the border between CSV and clusters is still in its infancy and almost nothing is known about their relationship, despite them being intimately related since the inception of this field. The paper qualifies for a very first attempt to understand how firms promote clusters, through cluster initiatives, for the sake of CSV and how clusters may enhance CSV of firms.“ [ABSTRACT FROM AUTHORS]

The Business Initiative for Technical Education (BITE): Creating Shared Value, Boosting a Country

By: J. M. Alcaraz, R. Hollander, A. Navarra. Competitiveness Review, Vol. 29, Iss. 1, pp. 8-25, 2019.

Abstract: “This paper aims to explore the creation of shared value (Porter and Kramer, 2011) through technical education by analyzing key events and factors associated with the midsize firm IMCA and the Business Initiative for Technical Education (BITE), a private-public alliance in the Dominican Republic. The paper results from a five-year longitudinal case study that included an embedded participant (the third author of the paper) and was based on structured and unstructured interviews, observations and multiple archival records. Thematic and content analyses were applied to most of these sources. IMCA’s staffing needs and search for a solid competitive strategy (one dependent on qualified technicians able to provide multiple services) was the original driver of BITE. The Initiative managed to enlist a formidable alliance of stakeholders, engaged in systemic, bottom-up, “small wins” approaches that targeted not only contents but also pedagogies that transformed multiple polytechnic schools. The initiative has resulted in significant corporate economic benefits and is currently altering fundamental aspects of the technical education of an entire nation. The research upon which the paper is based consists of a longitudinal case study comprising the years 2011-2015. BITE is a long-term project of which only the first stages have taken place. The paper focuses specifically on two modalities of shared value creation: productivity in the value chain and local cluster development. It expands the understanding of important issues around shared value creation through private investment in (technical) education, particularly around the following dimensions: curricular and pedagogical transformation, stakeholder engagement and place/time scale. Insights may be of particular relevance for developing regions with significant educational needs.“ [ABSTRACT FROM AUTHORS]

The Economic Complexity of US Metropolitan Areasç

By: B. S. L. Fritz, R. A. Mandouca. Zeppelin University; Harvard University; arXiv No. 1901.08112v1, 2019.

Abstract: “We calculate measures of economic complexity for US metropolitan areas for the years 2007-2015 based on industry employment data. We show that the concept of economic complexity translates well from the cross-country to the regional setting, and is able to incorporate local as well as traded industries. The largest cities and the Northeast of the US have the highest average complexity, while traded industries are more complex than local-serving ones on average, but with some exceptions. On average, regions with higher complexity have a higher income per capita, but those regions also were more affected by the financial crisis. Finally, economic complexity is a significant predictor of within-decreases in income per capita and population. Our findings highlight the importance of subnational regions, and particularly metropolitan areas, as units of economic geography.“[ABSTRACT FROM AUTHORS]

Incubators, Accelerators and Regional Economic Development

By: M. Madaleno, M. Nathan, H. Overman, S. Waights. CEP Discussion Paper No. 1575, ISSN 2042-2695, 2018.

Abstract: “A growing wave of co-location programmes promises to boost growth for young firms. Despite great public and policy interest we have little idea whether such programmes are effective. This paper categorises accelerators and incubators within a larger family of ‘co-location' interventions. We then develop a single framework to theorise workspace-level impacts. We summarise available evaluation evidence and sketch implications for regional economic policy. We find clear evidence programmes are effective overall. But we know little about how effects operate – or who benefits. Providers and policymakers should experiment further to establish optimal designs.“ [ABSTRACT FROM AUTHORS]

Spatial Distribution of Logistics Services in Brazil: a Potential Market Analysis

By: A. A. Moreira Rocha, F. Salgueiro Perobelli. Department of Economics, FEA-USP, Working Paper No. 2019-05, 2019.
Abstract: “The main objective of this work is to investigate the present and long-term spatial distribution of the logistics sector in Brazil. In order to do so, this study seeks to answer the following questions: i) how is the logistics sector organized in Brazil? that is, is there evidence of logistics clusters?; ii) what is the long- term perspective of this organization? The Logistics Potential Mapping Model (MapLog), inspired by Krugman's Core-Periphery Model, will serve as an analytical tool to verify the long-term spatialization of the logistics sector. The results point to a change within five decades (2015-2065) of the locational pattern of the logistics sector focused on industry but not for the logistics sector focused on agriculture.“ [ABSTRACT FROM AUTHORS]

National Industry Trade Shocks, Local Labor Markets, and Agglomeration Spillovers

By: I. Helm. Department of Economics, Stockholm University, Research Paper No. 2019:1, 2019.

Abstract: “Using a broad set of national industry trade shocks, I employ a novel approach to estimate agglomeration effects by exploiting within industry variation in indirect exposure to the other local industries’ (national) trade shocks across local labor markets. This variation stems from differences in local industry composition and allows to test for the existence of heterogeneous agglomeration effects across industries. I find considerable employment spillovers from other tradable industries’ trade shocks and even stronger effects within the same broad sector. Spillovers are larger for industries employing similar workers and are triggered predominantly by shocks to high technology industries.“ [ABSTRACT FROM AUTHORS]

Global Labor Flow Network reveals the Hierarchical Organization and Dynamics of Geo-industrial Clusters in the World Economy

By: J. Park, I. Wood, E. Jinga, A. Nematzadeh, S. Ghosh, M. Conover, and Y.-Y. Ahn. Indiana University; LinkedIn; S&P Global; arXiv: 1902.04613v3, 2019.

Abstract: “Groups of firms often achieve a competitive advantage through the formation of geo-industrial clusters. Although many exemplary clusters, such as Hollywood or Silicon Valley, have been frequently studied, systematic approaches to identify and analyze the hierarchical structure of the geo-industrial clusters at the global scale are rare. In this work, we use LinkedIn’s employment histories of more than 500 million users over 25 years to construct a labor flow network of over 4 million firms across the world and apply a recursive network community detection algorithm to reveal the hierarchical structure of geo-industrial clusters. We show that the resulting geo-industrial clusters exhibit a stronger association between the influx of educated-workers and financial performance, compared to existing aggregation units. Furthermore, our additional analysis of the skill sets of educated-workers supplements the relationship between the labor flow of educated-workers and productivity growth. We argue that geo-industrial clusters defined by labor flow provide better insights into the growth and the decline of the economy than other common economic units.“ [ABSTRACT FROM AUTHORS]

Cluster Externalities, Firm Capabilities, and the Recessionary Shock: How the Macro-to-micro-Transition shapes Firm Performance during Stable Times and Times of Crisis

By: C. Hundt, L. Holtermann, J. Steeger, J. Bersch. Thünen Institute of Rural Studies; Geography Department; Data Science Department; Centre for European Economic Research (ZEW); Papers in Evolutionary Economic Geography No. 19.07, 2019.

Abstract: “In this paper, we examine the macro-to-micro-transition of cluster externalities to firms and how it is affected by the macroeconomic instability caused by the recessionary shock of 2008/2009. Using data from 16,166 manufacturing and business services firms nested in 390 German regions, we employ within-firm regression techniques to estimate the impact of cross- level interactions between firm- and cluster-level determinants on phase-related differences in firm performance between a pre-crisis (2004-2007) and a crisis period (2009-2011). The empirical results validate the existence of a macro-to-micro-transition that evolves best in the case of broad firm-level capabilities and variety-driven externalities. Furthermore, the results indicate that the transition strongly depends on the macroeconomic cycle. While the transition particularly benefits from a stable macroeconomic environment (2004-2007), its mechanisms are interrupted when being exposed to economic turmoil (2009-2011). Yet, the crisis- induced interruption of the transition is mainly restricted to the national recession in 2009. As soon as the macroeconomic pressure diminishes (2010-2011), we observe a reversion of the transmission mechanisms to the pre-crisis level. Our study contributes to the existing literature by corroborating previous findings that the economic performance of firms depends on a working macro-to-micro transition of external re- sources, which presupposes sufficient cluster externalities and adequate firm-level combinative capabilities. In contrast to previous studies on this topic, the transition mechanism is not modeled as time-invariant. Instead, it is coupled to the prevailing macroeconomic regime.“ [ABSTRACT FROM AUTHORS]

Agglomeration Economies and Firm TFP: Different Effects across Industries

By: M. Gornig, A. Schiersch. Deutsches Institut für Wirtschaftsforschung, Discussion Paper, 1619-4535, 2019.

Abstract: “This paper analyzes the effect of agglomeration economies on firms’ total factor productivity. We propose the use of a control function approach to overcome the econometric issue inherent to the two-stage approach commonly used in the literature. Estimations are conducted separately for four industry groups, defined by technological intensity, to allow for non-uniform effects of agglomeration economies on firms given their technological level. In addition, R&D is included to account for the firms’ own efforts to foster productivity through creating and absorbing knowledge. Finally, radii as well as administrative boundaries are used for defining regions. The results confirm differences in the strength and even in the direction of agglomeration economies: While urban economies have the largest effect on TFP for firms in high-tech industries, they have no effect on TFP in low-tech industries. For firms in the latter industries, however, the variety of the local economic structure has an impact, while this is irrelevant for the TFP of firms in high-tech industries. Only localization economies have a positive and significant effect on TFP throughout, but the effect increases with technological intensity of industries. Throughout, R&D is also found to have a positive effect that increases with technological intensity.“ [ABSTRACT FROM AUTHORS]

Technological Cooperation and R&D Outsourcing at the Firm Level: The Role of the Regional Context

By: D. Tojeiro-Rivero, R. Moreno. Research Institute of Applied Economics, UBIREA; Regional Quantitative Analysis Research Group; Working Paper 2019/04; Working Paper 2019/03; 2019.

Abstract: “Much has been said about the role that technological networking activities play on the innovative performance of firms, but little is known about the relevance of the context where the firm is locate shaping the efficiency of such networking activities. In this article we hypothesize that the transformation of firms' networking activities into innovation may vary depending on the regional environment in which the firm is located. For Spanish manufactures in the period 2000-12 and through the use of a multilevel framework, we obtain that after controlling for the firm's characteristics, the regional context has not only a direct effect on firms' innovation performance, but it also conditions the returns to firms' networking activities, although differently in the case of cooperation and outsourcing. Cooperating in innovation activities is more beneficial for those firms located in a knowledge intensive region, whereas R&D outsourcing seems to be more profitable for firms in regions with a low knowledge pool.“ [ABSTRACT FROM AUTHORS]