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.

Spatial agglomeration and specialization in emerging markets: Economic efficiency of clusters in Thai industries

By: M. Resbeut, P. Gugler, D. Charoen. Competitiveness Review, Vol. 29, Iss. 3, pp. 236-252, 2019.

Abstract: “The paper aims to investigate the role of specialization and agglomeration forces on industry performance in an emerging market, namely, Thailand. In particular, the impact of clusters and the influence of complexity will be tackled. The methodology used is based on the work of Delgado et al. (2014). Industries and clusters are assigned to a certain category according to their respective level of specialization and complexity. Performance measures are then computed for each category. It was found that the agglomeration of similar industries and co-located and related industries increase the performance of firms in terms of gross output per employee and remuneration per employee. Moreover, the increase of performance induced by the complexity level of an industry was closely related to the level of specialization. Building on a cluster mapping, this study brings new insight on the effect of specialization and agglomeration on performance in emerging markets. In fact, the paper show how performance can be enhanced in less sophisticated and developed economies.” [ABSTRACT FROM AUTHORS]

Competitive advantage and industrial district: A review of the empirical evidence about the district effect

By: E. Claver-Cortés, P. Seva-Larrosa, L. Ruiz-Fernández. Competitiveness Review, Vol. 29, Iss. 3, pp. 211-235, 2019.

Abstract: “This paper aims to know the dimension and scope that research on the district effect has had in the literature about industrial districts, as well as to shed some light on the connection between industrial districts and business results; or expressed differently, on how being located in an industrial district or not affects or might influence the performance of the firms located therein. The purpose of this paper has been achieved through an exhaustive review of the empirical literature dedicated to the so-called district effect. The papers selected in the analysis were selected on the basis of the following criteria: (1) publications in scientific journals; (2) studies carried out in Spain and Italy; and (3) works published between 1994 and 2017. The outcome of the literature review suggests, on the one hand, that the debate on the extent to which the territory influences the competitiveness of firms located in industrial districts still remains a topic of great interest. It can additionally be observed that most of the works dedicated to measuring the district effect have done so using three dimensions: (1) productivity/efficiency; (2) international competitiveness; and (3) innovation. From a theoretical perspective, the findings of this paper make it possible to carry out an integrating proposal for the measurement of the district effect which revolves around three dimensions (productivity/efficiency; international competitiveness; and innovation). This paper makes a twofold contribution to the literature: (i) it brings together the most important empirical contributions that measure the competitive advantages obtained by firms located in industrial districts through the district effect; and (ii) it theoretically and empirically establishes the essential dimensions of that effect.” [ABSTRACT FROM AUTHORS]

Emergence of a digital cluster in east London: birth of a new hybrid firm

By: G. L. Evans. Competitiveness Review, Vol. 29, Iss. 3, pp. 253-266, 2019.

Abstract: “This paper aims to investigate the composition and geography of an emerging “creative digital” cluster in London, in the context of cluster theory and emerging creative cluster concepts. This argues that this cluster cannot be divorced from the wider regional creative and digital economy and that its inter-dependence with a small number of “content” industries is critical to its formation. The significance of the “creative digital” firm blending design, communications and technological development is highlighted, as is its unique position in enabling such firms to flourish. The research combines both quantitative with qualitative methods, based on cluster analysis of firm-level business data using GIS mapping software at a regional level; location quotient (LQ) analysis to reveal firm concentration at a local cluster level; an online questionnaire survey of firms within this cluster; participant observation of firm meet-ups over a three-year period; and face-to-face interviews with a sample of firms/owners. The evidence generated from this research confirms the distinctive nature of this digital cluster and the benefits of co-location in an industrial district with proximities to a range of advanced producer services and cultural content provision. This has revealed an emerging “techno-creative habitus” (Scott 2010), which has been able to take advantage of market fluidity through a network of communities of interest firms, which have reshaped an existing global hub locally anchored by a highly porous locale. The research is novel in combining spatial data analysis with qualitative research into firm behaviour and place-based factors that support the growth of this cluster. This has revealed new insights into the hybrid nature of tech firms that integrate content with both hardware and software applications and who innovate and grow through inter-personal cluster networks. This contributes to cluster theory and extends the range of proximities – social, institutional and cultural – that enhance the geographic advantages of clustering in this case.” [ABSTRACT FROM AUTHOR]

The impact of actors, networks and institutions in the cluster’s evolution: The case of the Brazilian ceramic tile industry

By: G. Scur, R. Garcia. Competitiveness Review, Vol. 29, Iss. 3, pp. 267-286, 2019.

Abstract: “This paper aims to analyze the impact of the capabilities and strategies of the actors (micro-dynamics), learning process and networks (meso-dynamics) and institutions (macro-dynamics) in the evolution of the Brazilian ceramic clusters. Based on these experiences, managerial and policy implications are suggested. Main data were gathered through 22 in-depth face-to-face interviews with managers and industry experts. The data were complemented by documentary analysis, including brand documents, descriptions of internal processes and Brazilian and international ceramics magazines and journals. In addition, the authors also use information from the previous experience of the authors who have been studying the sector for more than 15 years. The paper provides empirical insights about the main characteristics of the evolution of two main Brazilian ceramic tiles clusters, as well as how there are different patterns of evolution among them. The results of this paper show that Brazilian ceramic tile clusters do not necessarily follow the life cycle model of their dominant industry, by proving evidence that different clusters in the same industry can follow different evolutionary paths. This paper shed light on a multi-level approach (micro, meso and macro) of dynamics of the clusters and how it impacts the cluster’s life cycle. The micro-dynamics dimension was analyzed by the capabilities and strategies of local ceramic tile manufacturers. The meso-dynamics are being considered the localized learning processes, especially from those that arise from interactions, collaboration and networks carried by local and foreign suppliers. The macro-dynamics were considered by the role of local demand, factors conditions, institutions, historical legacy in the clusters’ emergence along with path dependence mechanisms. The paper includes implications for both clusters to promote innovation, particularly to keep and create market and technological leadership through the establishment of partnership between firms and clients, regulators and research centers and universities are crucial for innovation. This paper fulfils an identified lack of attention regarding the under-appreciation of the context-specific issues such as the capabilities of the actors, networks and institutions that may influence the long-term development of clusters.” [ABSTRACT FROM AUTHORS]

The significance of proximityin cluster initiatives

By: A. M. Lis. Competitiveness Review, Vol. 29, Iss. 3, pp. 287-310, 2019.

Abstract: “The purpose of this paper is to analyse relations between geographical and competence proximity and development of cooperation in cluster initiatives. The research was based on an original theoretical concept referring to the trajectory of the development of cooperative relations in cluster initiatives. The research was carried out in mid-2017, in four purposefully selected cluster initiatives. The research sample was 132 cluster enterprises. The main research strategy involved non-experimental models; the basic method of data collection was an online questionnaire. The results indicated that the role of geographical and competence proximity depends on the level of cooperation in a cluster initiative. In both these dimensions, proximity was important during the initial stage of cluster development: to start cooperation between the members, however, when more mature forms of cooperation were undertaken, the factor of common location was not so crucial any longer. It was also recommended to maintain some competence distance between the partners. The main limitations referred to the static character of the data, the use of original measurement tools, which had not been tested before, the small and little differentiated research sample and the subjective nature of the research. The above-mentioned limitations should be viewed as a starting point for further empirical research. Knowledge on the significance of geographical and competence proximity at various levels of cooperation in clusters is valuable for efficient management of a cluster and for higher competitiveness that it can achieve. The research study contributes to the literature, which refers to the question of proximity in clusters through the analysis of relations between geographical and competence proximity and development of cooperation in cluster initiatives. The results of the research point out that the role of geographical and competence proximity evolves with the development of cooperation in cluster initiatives.” [ABSTRACT FROM AUTHOR]

Agency in regional path development: Towards a bio-economy in Värmland, Sweden

By: S. Jolly, M. Grillitsch, T. Hansen. Lund University, Centre for Innovation, Research and Competence in the Learning Economy (CIRCLE), Papers in Innovation Studies, Paper no. 2019/07, 2019.

Abstract: “Despite significant interest in regional industrial restructuring in economic geography, surprisingly scarce attention has been paid to the changing role of agency over time. The current paper develops a framework for understanding the role of multiple types of agents and the agency they exercise for new path development. The framework is employed in a longitudinal study of industry development in Värmland, Sweden, from forestry towards a bio-economy. The analysis highlights how actors exercise very different types of agency in different periods of path development.” [ABSTRACT FROM AUTHORS]

Industrial agglomeration in Myanmar

By: J. Rand, F. Tarp, N. Trifkovíc, H. Zille. United Nations University, Institute for Development Economics Research, WIDER Working Paper 2019/3, 2019.

Abstract: “Focusing on labour productivity and working conditions, we investigate the benefits of industrial zones for private manufacturing enterprises in Myanmar. We find that being located in an industrial zone associates with higher labour productivity. Value added gains, however, are not transferred to employees. The results are robust to different measures of productivity and model specifications, as well as to controlling for the natural level of industrial agglomeration in a particular location. The findings in general indicate additional benefits of planned industrial activities as opposed to naturally driven industrial clustering.” [ABSTRACT FROM AUTHORS]

Reducing regional disparities for inclusive growth in Spain

By: M. Adalet McGowan, J. A. San Millán. OECD Economics Department, Working Papers No. 1549, 2019.

Abstract: “Spain is a highly decentralised country, making the effective implementation of national reforms dependent on regional policies. Some regional disparities are high and need to be reduced. High regional dispersion in education and job outcomes, compounded by low inter-regional mobility, emerge as key drivers of regional inequalities in income and well- being. Lifelong learning programmes that take into account regional specific needs would help foster regional skills and attract firms to lagging regions. Ensuring full portability of social and housing benefits across regions, by providing temporary assistance either by the region of origin or the central government, would improve inter-regional mobility. At the same time, barriers to achieving a truly single market limit productivity growth of regions, including the most advanced. Reducing regulatory barriers and better innovation policies would boost productivity. Effective intergovernmental coordination bodies and a well- designed interregional fiscal equalisation system will be key to ensuring that regions have the incentives to implement policies for inclusive growth.” [ABSTRACT FROM AUTHORS]