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.

Location and competitiveness in subsistence small businesses

By: C. M. Jardon. Competitiveness Review: An International Business Journal, Vol. 28, Iss. 2, pp.155-171, 2018.

Abstract: “This paper aims to analyse the location as root of the specificity of the sources of competitiveness in subsistence small businesses (SSBs) of wood industry to improve the situation of poverty and the different behaviour of subsistence entrepreneurs. The research uses an exploratory analysis based on principal components in two phases and confirmatory analysis based on partial least square techniques applied to a sample of 113 small and medium enterprises of wood industry in Oberá, a region of Argentina. The analysis evidences the use of competitiveness sources of SSBs and a double behaviour in SSBs according to subsistence threshold. Satisfactory SSBs use competitiveness sources to improve organizational and economic performance. Unsatisfactory SSBs find economic performance without relation to organizational performance. Data are cross-sectional, and in a conjuncture of economy expansion, future research should monitor the sample of firms using panel data to assess the development of relations. Sample is in a particular region and sector, and generalizations should be done carefully. SSBs should raise the strategy integrating short and long term, which requires a strengthening of intellectual capital, especially in cooperation, professionalism and training. They could integrate and share a business community to develop competitive advantages of collective systemic. The research shows the importance of the location for the competitiveness of SSBs and provides a classification of SSBs according to their performance.”

Determinant factors of competitiveness in the hotel sector: the case of Portugal

By: S. Nunes, C. Estevão, M. Nicolau Filipe. Competitiveness Review: An International Business Journal, Vol. 28, Iss. 2, pp.122-135, 2018.

Abstract: “Competitiveness has been the objective of investigation in tourism in general, and particularly in hospitality, by many researchers in the past decades. The purpose of this study is to identify which main factors are considered crucial for the increase of competitiveness in hospitality, by applying the Porter’s diamond model to this sector. The methodology used in the study required the use of primary data from which the authors obtained 285 responses from companies related to hospitality in Portugal. In the processing of data, the authors used a structural equation model. The results showed that “government policies”, “factor conditions”, “related and supporting industries” and “cooperation and innovation” were determinant factors of the competitiveness of the sector. Despite the importance of competitiveness in hospitality, the number of studies focused on the empirical validation models of competitiveness, applied to the hospitality industry, is still incipient. This study contributes to fill this gap.”

Regional patent activity in Russia: does level of risks make a difference?

By: N. Ermasova, O. Ijose, S. Ermasov. Competitiveness Review: An International Business Journal, Vol. 28, Iss. 2, pp.136-154, 2018.

Abstract: “The purpose of this paper is to explore empirically the linkages among level of economic, managerial, financial, criminal risks and patent activity in Russia. This paper examines the relationship between the economic, managerial, financial and criminal regional risks ratings, on the one hand, and patent activity, as measured by regional patent applications for inventions, on the other. A random effect model was performed for a data sample of 83 regions, covering the period 2006-2010 in Russia. The empirical results show that increased levels of regional economic risks are significantly associated with decrease in patent activity in Russia. This study fills a gap within the literature and offers a unique analysis of regional risks and their impact on patent activity. The empirical results showed that economic risk ratings have had considerable negative impact on the patent activities on regional level in Russia.”

Place-based innovation policy for industrial diversification in regions

By: M. Grillitsch, B. Asheim. European Planning Studies, DOI: 10.1080/09654313.2018.1484892, 2018.

Abstract: “New industrial innovation policies like smart specialization aim at boosting economic growth by diversification towards more complex and higher value economic activities. This paper proposes a conceptual and analytical framework to support the design and implementation of such policies considering place-specific preconditions, particularly the differentiation of the regional system of innovation and entrepreneurship and the degree of current industrial diversification. The paper expands on the links between these preconditions and the barriers and opportunities for industrial diversification. Consequently, it proposes an archetypical place-based policy framework covering overall policy objectives as well as measures at the level of actors, networks, and the institutional and organizational support structures.”

Cluster policy and firm performance: a case study of the French optic/photonic industry

By: A. Ben Abdesslem, R. Chiappini. Regional Studies, DOI: 10.1080/00343404.2018.1470324, 2018.

Abstract: “This study analyzes the effects of a cluster policy on firms’ productivity, employment and total fixed assets in the French optic/photonic industry. Exploiting firm-level data between 1996 and 2008, it analyzes the selection process of the cluster policy through a logit model, before combining a propensity score matching (PSM) procedure and a difference- in-differences estimation to capture its impact on firms’ performance. It is shown that larger firms are more likely to be selected by the public policy. Second, the firms that received the competitiveness cluster certification became more productive and increased both their employment and their total fixed assets levels.”

Nothing is in the air

By: R. Dahl Fitjar, A. Rodriguez-Pose. Growth and Change, 48 (1), ISSN: 0017-4815, 2018.

Abstract: “It has often been argued that ‘there is something in the air’ which makes firms in high-density environments – such as cities or clusters – more innovative. The co-location of firms facilitates the emergence of serendipity and casual encounters which promote innovation in firms. We assess this hypothesis using data from a survey of Norwegian firms engaged in innovation partnerships. The results indicate that there may be ‘much less in the air’ than is generally assumed in the literature. The relationships conducive to innovation by Norwegian firms emerged as a consequence of purpose-built searches and had little to do with chance, serendipity, or ‘being there’.”

Exploring financial centre networks through inter-urban collaboration in high-end financial transactions in China

By: F. Pan, W. Bi, X. Liu, T. Sigler. Regional Studies, DOI: 10.1080/00343404.2018.1475728, 2018.

Abstract: “This study employs social network analysis to investigate financial networks in China through collaboration between advanced producer services firms in initial public offerings. The results reveal that Beijing, Shenzhen and Shanghai have strategically dominant network positions, and that Beijing–Shenzhen is the most influential city dyad. Cities’ positions are explained by the advantages of both spatial and institutional proximity, defined by arm’s-length transactions to relevant partner firms and government bodies. The network hierarchy mirrors the country’s political hierarchy, as network positionality is tied to the location of large state-owned enterprises, government regulators and the embedded power structures that reflect this.”

Heterogeneous Foreign Direct Investment and Local Innovation in Italian Provinces

By: A. Ascani, P.-A. Balland. Utrecht University, Papers in Evolutionary Economic Geography, N. 18.20, 2018.

Abstract: “Countries and regions all over the world compete to attract Foreign Direct Investment (FDI) as a way to access knowledge, technology, and boost economic development. Although the literature shows a positive impact of FDI on local economies, little is known about (1) the impact on innovation of neighboring regions and the type of FDI that generates the strongest learning effects. To fill this gap, this article investigates the relationship between FDI and the innovation capacity of Italian provinces (NUTS3). In order to capture the heterogeneity of FDI in terms of knowledge inputs, we apply the Pavitt categorization of manufacturing sectors to inward FDI within Italian provinces, thus accounting for the nature and sources of knowledge in different sectors where foreign multinationals are active. Our results suggest that only some specific typologies of inward FDI, such as that in “Science based” sectors and to a lesser extent in “Specialized supplier” activities, benefit local economies. Nevertheless, other types of inward FDI can produce possible negative outcomes in terms of local innovation. We detect only weak evidence on the spatial implications of inward FDI.”

Contagious Exporting and Foreign Ownership: Evidence from Firms in Shanghai using a Bayesian Spatial Bivariate Probit Model

By. H. Baltagi, P. H. Egger, M. Kesina. The Maxwell School, Working Paper N. 211, ISSN: 1525-3066, 2018.

Abstract: “Whether a firm is able to attract foreign capital and whether it may participate at the export market depends on whether the fixed costs associated with doing so are at least covered by the incremental operating profits. This paper provides evidence that success for some firms in attracting foreign investors and in exporting appears to reduce the associated fixed costs with exporting or foreign ownership in other firms. Using data on 8,959 firms located in Shanghai, we find that contagion and spillovers in exporting and in foreign ownership decisions within an area of 10 miles in the city of Shanghai amplify fixed-cost reductions for both exporting as well as foreign ownership of neighboring firms. Contagion among exporters and among foreign-owned firms, respectively, amplify shocks to the profitability of these activities to a large extent. These findings are established through the estimation of a spatial bivariate probit model.”

Spatial and sectoral differentiation of support to innovative companies from EU funds in Czechia

By: D. Hána, L. Hellebrandová. European Planning Studies, DOI: 10.1080/09654313.2018.1485135, 2018.

Abstract: “This paper aims to introduce a case study of Czechia in distribution of the EU funds and their spatial patterns. EU funds receive plenty attention from both European society and the scientific community. However, there is a lack of detailed evaluations of spatial and sectoral differentiation, which might bring a better understanding to the whole EU funds system. This paper attempts to fill this gap with a method of geographical differentiation analysis of the Czech operational programme Enterprise and Innovations 2007–15, which should increase the competitiveness of industry and develop services for commercial activities. Historically, subsidies often go to peripheral regions at the borderland with Slovakia and Poland, while regions along the borders with Germany and Austria receive only a low level of support. Jurisdictions of the major recipients from hi-tech sectors are mainly in the close vicinity of the largest cities (Praha, Brno), which are natural centres of high technologically demanding sectors, but a high share of high-tech subsidies goes to some peripheral districts as well. These findings can contribute not only to the academic discussion about contradictory developmental impacts of subsidies but to the all-European debate on the EU funds purposes as well.”

Knowledge-intensive territorial servitization: regional driving forces and the role of the entrepreneurial ecosystem

By: K. Horváth, R. Rabetino. Regional Studies, DOI: 10.1080/00343404.2018.1469741, 2018.

Abstract: “This study analyzes how regional manufacturing characteristics, i.e., specialization and the size of new manufacturers, and the entrepreneurial ecosystem, i.e., contextual factors driving entrepreneurial actions, impact the rate of new knowledge- intensive business service (KIBS) firms. Its spatial analysis of 121 European regions reveals that the entrepreneurial ecosystem plays a decisive role in supporting KIBS formation rates in territories with a solid industrial fabric. The economic potential of more attractive neighbouring regions can be detrimental to regional KIBS formation rates. The study offers valuable implications on how the entrepreneurial ecosystem can facilitate the interaction between manufacturing and KIBS firms.”