This monthly selection of articles is been carried out by Philippe Gugler and Basile de Raemy, from 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.

Can innovative industrial clusters enhance urban economic  resilience? A quasi-natural experiment based on an innovative pilot policy

By: S. Xu, M. Zhong, Y. Wang. Energy Economics, DOI: 10.1016/j.eneco.2024.107544, June 2024.

Abstract: “Using data for 285 cities in China spanning the period from 2010 to 2019, we investigate the overall effect, heterogeneity, and mechanisms of industrial cluster development on urban economic resilience using the staggered difference-in-differences method (DID). Our study shows that innovative industrial clusters can improve local urban economic resilience and offer a cumulative learning effect, but increase economic vulnerability in neighboring cities. A heterogeneity analysis finds that piloting innovative industrial clusters has a more significant influence on economic resilience in more mature clusters, middle-labor-scale cities, areas with moderate economic development, and regions applying more artificial intelligence (AI) technology. An influencing mechanism analysis shows that piloting innovative industrial clusters mainly appears as a scale effect in the earlier stage of green finance development, while there is a network effect in the later stage, both of which promote economic resilience. This conclusion may serve as the foundation for more secure and sustainable growth in the global economy.” [ABSTRACT FROM AUTHORS]

The importance of agricultural  clusters for the development of rural regions

By: S. Yekimov, S. Kontsevaya, A. S. Poltorak, O. Sharin, I. Verkhovod, Y. Kuris. E3S Web of Conferences, DOI: 10.1051/e3sconf/202453803004, June 2024.

Abstract: “The formation of agro-industrial clusters makes it possible to increase the competitiveness of agricultural regions. Agricultural clusters allow increasing food production, as well as creating an integrated, geographically localized structure that includes the entire chain involved in the production of agricultural products, starting from the sale and maintenance of agricultural machinery and ending with the storage and processing of crops. The agro-industrial cluster allows the dissemination of innovations among the enterprises participating in this cluster. Within the framework of the agricultural cluster, favorable conditions are created for the exchange of experience and knowledge, which contributes to the creation and implementation of new technologies and ideas. Agricultural clusters can be in demand by private investors, as well as attract skilled labor from other sectors of the economy. Agricultural clusters help the development of ecosystems in agricultural regions. These ecosystems include agricultural producers, research centers, universities and food industry enterprises. Successful agricultural clusters can contribute to the development of green tourism in the region. The creation of agricultural clusters contributes to the development of regional social infrastructure, provides conditions for the sustainable development of the region, improves the standard of living of the population, which makes it possible to reduce migration flows to other regions.” [ABSTRACT FROM AUTHORS]

A spatial analysis of one of the regional logistics clusters  in central Poland using GIS

By: I. Jażdżewska, K. Żerek. Environmental & Socio-economic Studies, DOI: 10.2478/environ-2024-0012, June 2024.

Abstract: “Logistics services are a consequence of increasingly rapid economic development and globalisation. More and more facilities with adequate transport accessibility are being created for the storage of goods, which form logistics clusters. They emerged later in Central and Eastern Europe than in the United States and Western Europe. Investment in Poland's first logistics parks can be linked to the political and economic transformation in 1989, Poland's accession to the European Union in 2004, the development of motorways, and Poland's integration into the global economy. In the second decade of the 21st century, there are more than a dozen places in Poland that can be called logistics clusters. The purpose of this research was to geographically analyse a selected regional cluster located in Lodz voivodeship, as well as its links to the transport network of Poland and Europe. Geostatistical and GIS methods were used for spatial analysis. It was shown that its spatial distribution is strongly related to the A1 highway, the intersection of the A1 and A2 highways and the voivodeship city of Lodz. The characteristics of the geographic environment give reason to suggest that it has great development potential and is worthy of further observation and comparative studies.” [ABSTRACT FROM AUTHORS]

Heterogenous university funding  programs and regional firm innovation An empirical analysis of the German  Excellence Initiative

By: B. Krieger. Research Policy, DOI: 10.1016/j.respol.2024.104995, June 2024.

Abstract: “This paper estimates the effect of heterogeneous university funding programs within the German Excellence Initiative on a regional firm's probability to innovate by using a multi-valued two-way fixed effects difference-in-differences model. The estimations show that funding an additional Excellence Cluster focused on internationally competitive research within a labor market region increases a regional firm's probability to innovate. This effect is driven by firms within labor market regions receiving a high number of Excellence Clusters. There is no statistically significant effect for receiving a low number of Excellence Clusters. Moreover, we find no consistent statistically significant effect of funding Graduate Schools concentrating on training scientists nor of funding University Strategies promoting the overall long-term plan of a university.” [ABSTRACT FROM AUTHOR]

Exploring the impacts of ecommerce activities on the spatial  resilience of warehouse clubs: the role of retail agglomeration

By: X. Pan, G. Li, M. Dresner, B. Mantin. International Journal of Physical Distribution & Logistics Management, DOI: 10.1108/IJPDLM-12-2022-0365, May 2024.

Abstract: “Purpose – As ecommerce becomes more prevalent, traditional brick-and-mortar retailers such as warehouse clubs (WCs) face the challenging task of maintaining and growing their customer base. This study aims to unravel the combined impact of retail agglomeration and ecommerce activities on consumer foot traffic (also referred to as “footprint”) at WC stores, placing an emphasis on the locational strategies adopted by WCs in this evolving retail landscape. Design/methodology/approach – Mobile-based customer foot traffic data for Costco, a major U.S. WC chain, is sourced for our analysis. We use Principal Component Analysis (PCA) to identify dimensions of general merchandise (GM) and narrow-range merchandise (NM) retail agglomeration. Two-stage least squares (2SLS) regressions are used to explore how the intensity of ecommerce activities and WC locational choices within retail agglomerations impact WC foot traffic. Findings – Our analysis highlights a notable decline in WC store visits attributable to both GM and NM ecommerce activities, with GM ecommerce presenting a more significant competitive challenge to WCs. Regarding retail agglomerations, proximity to GM clusters that include a diverse range of supercenters, department stores, and club stores, is associated with an increase in WC customer visits within their vicinity. In contrast, the influence of NM agglomerations is mixed; clusters adjacent to grocery stores lead to higher WC customer traffic compared to those focused on other specialized stores. These findings underscore the strategic importance of location in mitigating the adverse effects of ecommerce competition. Additionally, our study uncovers intricate dynamics between GM and NM retail clusters and ecommerce activities, demonstrating varied impacts on WC customer footprint. Research limitations/implications – Access to customer footprint data illustrates the potential of this data source for retail decision making and researchers. Our analysis is limited to one chain, notably Costco. Practical implications – Our findings underscore the need for retailers to adeptly navigate the evolving retail landscape, including the confluence between physical and digital retail environments, to secure future success. In particular, our results emphasize the benefits of locating stores within mixed retail agglomerations and underline the need to consider the broader retail landscape in location decisions. Social implications – The rise of ecommerce in the U.S. has reshaped consumer behavior and altered local shopping districts’ communal dynamics. This change may spur policy interventions to help physical stores compete with online retailers, emphasizing the importance of retail diversity and community-centric environments to sustain communal retail interactions amidst digital advancements. Originality/value – The paper makes use of a unique dataset to provide a first assessment of the combined effects of retail agglomeration and ecommerce activities on consumer foot traffic for WC retailers. Thus, this paper provides insights into the impacts on consumer shopping behavior from the dynamic interactions between physical retail clusters and online shopping behaviors.” [ABSTRACT FROM AUTHORS]

The role of agglomeration in digitalization and productivity: an  empirical examination of manufacturing SMEs in South Korea 

By: T. Choi, J. Park. Asian Journal of Technology Innovation, DOI: 10.1080/19761597.2024.2355223, May 2024.

Abstract: “This study examines the relationship between regional agglomeration and the digitalisation of manufacturing small and medium enterprises (SMEs), and how this interplay affects their productivity. Using two analytical models, we investigate the correlation of regional agglomeration factors such as industrial specialisation, related and unrelated variety, urbanisation economies and the spatial concentration of suppliers with SMEs’ digitalisation level in South Korea. Our findings indicate that related variety within regional agglomerations positively influences digital innovation, facilitating knowledge spillovers particularly beneficial for SMEs with higher levels of digitalisation. The study reveals a differentiated impact of agglomeration economies on SMEs based on their digital maturity. While high-level digitalised enterprises benefit from related variety and urbanisation economies, those in the initial stages of digital adoption gain proximity to digital technology suppliers. The 2SLS models further demonstrate that digitalisation significantly enhances productivity across all levels of digital technology adoption among SMEs. This study emphasises the conditional nature of the effects of regional agglomeration on digitalization and productivity, advocating for nuanced support strategies that cater to the varying digital maturity stages of SMEs, which are valuable for policymakers and business leaders in fostering a supportive regional ecosystem that propels SMEs towards greater productivity in the digital economy.” [ABSTRACT FROM AUTHORS]

Shortening the distance between firms for M&A: the influence of  small-world network structure on mergers and acquisitions

By: T. de Sousa Barros, J. Cárdenas, A. Ribeiro Hott. International Journal of Emerging Markets, DOI: 10.1108/IJOEM-11-2021-1792, May 2024.

Abstract: “Purpose – A small-world network is a type of network structure in which nodes are highly clustered and at short distances without being directly linked. This article analyzes whether the network of interlocking directorates among the largest Brazilian corporations follows a small-world network structure and if the small world properties (high clustering and short distance between nodes) influence the occurrence of M&A at the domestic and international level. Design/methodology/approach – The authors tested hypotheses regarding the relationship between small world network properties and M&A based on a sample of large publicly-listed corporations in Brazil for the time series of 2000–2015 and using network analysis and regression techniques (probit and OLS). Findings – The results show that while the Brazilian corporate network fits the small-world features of high clustering and short path lengths, only the distance among connected firms has a significant effect on international M&A: the shorter the distance between firms, the more likely firms undertake M&A abroad. Moreover, being integrated into the main component has a significant positive effect on national and international M&A. These findings suggest that the information and knowledge to undertake M&A can be better acquired by belonging to large business communities and not local cohesive clusters. Originality/value – This research contributes to theories and ongoing debates about the network effects on organizational decisions and the determinants of M&A in emerging markets. In addition, this is the first study to analyze the impact of small-world networks on international M&A while controlling for country-level variables.” [ABSTRACT FROM AUTHORS]

Premature agglomeration?: Two phases of development with spatial sorting

By: R. Forslid, T. Okubo. Wiley, DOI: 10.1111/manc.12484, May 2024.

Abstract: “Clusters in the developing world do, to a large extent, attract low-educated individuals, and these clusters are in some cases, characterized by urbanization without industrialization. This contrasts starkly to clusters in advanced economies that attract high-skilled individuals and entrepreneurs. In this paper, we develop a model of agglomeration and spatial sorting that is consistent with these two types of different agglomeration processes in developed and developing countries. We show that a poor country that has an agglomeration with low skilled individuals, may get stuck in this equilibrium, but that free mobility of human capital from the outset nevertheless is superior from the perspective of total social welfare.” [ABSTRACT FROM AUTHORS]