This monthly selection of articles is carried out by Philippe Gugler and Samuel Ferreira Gomes, 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.

Clustering, growth  and inequality in China

By: D. Guo, K. Jang, C. Xu, X. Yang. Journal of Economic Geography, Volume 20, Issue 5, September 2020, Pages 1207–1239.

Abstract: “This study examines the effects of China’s industrial clusters on regional economic growth and urban–rural income inequality within a region. A density-based index (DBI) is developed to capture the unique features of cluster development in China. From a county-level DBI panel data constructed based on firm- and county-level datasets, we find that clusters enhance local economic growth substantially. Moreover, the existence of entrepreneurial clusters (clusters mainly consist of nonstate-owned firms) helps to reduce local urban–rural income inequality by increasing the income of local rural residents. We also find that the clustering effects on growth and reduction of inequality are less significant in more urbanized regions or megacities. Identification issues are carefully addressed by deploying two-stage estimations with instrumental variables and Granger test.” [ABSTRACT FROM AUTHORS]

What drives the delegation of innovation  decisions? The roles of firm innovation strategy and the nature of external  knowledge

By: M. G. Colombo, N. J. Foss, J. Lyngsie, C. Rossi Lamastra. Research Policy, https://doi.org/10.1016/j.respol.2020.104134, 2020.

Abstract: “We study what determines delegation of authority over innovation decisions in firms. Extant research that addresses this topic in an open innovation context, suggests that firms that engage in open innovation tend to delegate authority over innovation decisions. We provide a more nuanced argument that considers important contingencies. Thus, we argue that the extent of delegation depends upon the combined effect of the relative importance of innovation decisions to the firm's strategy and, when a firm engages in open innovation, on the nature of the external knowledge (scientific vs. practical) that it seeks to absorb from the external environment. We test our hypotheses on data from a double-respondent survey of Danish firms that we link to Community Innovation Survey data and to the Danish Integrated Database for Labor Market Research. We provide econometric results that support our hypotheses.” [ABSTRACT FROM AUTHORS]

A multi-sector model  of relatedness, growth and industry clustering

By: S. C. Bond-Smith, P. McCann. Journal of Economic Geography, Volume 20, Issue 5, September 2020, Pages 1145–1163.

Abstract: “This article builds an understanding of regional innovation specialisation by developing a multi-sector model with endogenous growth through quality improving innovations and spillovers from related technologies. The model provides an approach to incorporate the relatedness literature within the mainstream theoretical frameworks of endogenous growth and economic geography. Each firm’s technology sector and the location of other firms play a role in each firm’s ability to improve its own technology. As a result, firms prefer to co-locate in technologically compatible clusters. Without relying on scale assumptions, the model for the first time coherently links related variety knowledge spillovers to mainstream urban economic frameworks and demonstrates that clustering is possible in both core and peripheral areas.” [ABSTRACT FROM AUTHORS]

Tales of the city: what do agglomeration  cases tell us about agglomeration in general?

By: G. Faggio, O. Silva, W. C. Strange. Journal of Economic Geography, Volume 20, Issue 5, September 2020, Pages 1117–1143.

Abstract: “It is difficult to define, let alone locate, knowledge. Research in regional studies suggests that cities are the focus of knowledge-intensive business services (KIBS), attract knowledge workers, and concentrate research and development (R&D) and universities: the implication is that knowledge is created in and diffused from urban centres. We suggest this may be a consequence of only studying knowledge that is relevant to, and used by, city-based industries: a growing number of researchers show that some types of knowledge are generated in non-urban or small-town clusters. This study focuses on the geography of KIBS (a proxy for knowledge inputs) used by Canadian winemakers (an emerging sector located in rural areas). After questioning what is meant by ‘knowledge’, we show that services incorporating knowledge of different types are sourced from different types of location. We conclude that there is no single geography of knowledge: for winemakers, different types of knowledge are sourced from cities, wine regions and also dispersed non-urban areas.” [ABSTRACT FROM AUTHORS]

Spatial spillovers of  agglomeration economies and productivity in the tourism industry: The case of  the UK

By: K. Yoo Ri, W. Allan M., P. Sangwon, C. Jason Li. Tourism Management, Volume: 82, Article Number 104201, DOI: 10.1016/j.tourman.2020.104201, 2020.

Abstract: “This research investigates the direct and (indirect) spatial spillover effects of agglomeration economies on the productivity of the tourism industry. With increasing concerns about the persistence of low (labour) productivity in tourism across many developed economies, there is an urgent need to address this productivity challenge. Using major under-exploited UK microeconomic panel data, spatial econometric modelling is employed to estimate the effects of agglomeration economies on productivity. Findings reveal the significant effects of agglomeration economies on productivity within a specific region, but also significant spatial spillover effects across neighbouring regions, suggesting the possibility of productivity convergences. Competitive and complementary effects of agglomeration economies on productivity are identified.” [ABSTRACT FROM AUTHOR]

The 21^st century  corporate town: The politics of planning innovation districts

By: L. Heaphy, A. Wiig. Telematics and Informatics, Volume: 54, Article Number 101459, DOI: 10.1016/j.tele.2020.101459, 2020.

Abstract: “High-tech corporations have established a foothold in cities through innovation districts. Across the north Atlantic, these are typically waterfront urban renewal projects that repurpose formerly industrial land contiguous to the city centre into fully master-planned sites that also include smart city developments. Our case study focuses on the governance and spatial planning of waterfront innovation districts in Boston in the United States and Dublin in Ireland. Both cases reflect a trend to create high-value clusters attracting research and development from globalised tech firms as well as fostering local enterprise. The fluidity and mobility of multinational capital attached to the tech economy leverages digital and civic investment in these districts as a means of corporate attraction and retention: the smart city becomes one for skilled, globally-mobile tech workers adjacent to, but socially and spatially partitioned from, historically working class port communities. This process is marked by the degree to which such districts can be, firstly, disconnected from city-wide planning agendas, and secondly, the degree to which they interface and share resources and amenities with surrounding neighbourhoods. Thus, we argue, there is the potential for further market capture of urban revitalisation policies by high-tech firms, leading to the creation of 'corporate towns' and a new era of uneven development. The politics of urban planning can both restrict the democratic process in the city, and curtail the forms of smart city, civic technologies into those primarily beneficial for high-tech corporations and their workforce.” [ABSTRACT FROM AUTHOR]

R&D tax credit and innovation:  Evidence from private firms in India

By: O. Ivus, M.  Jose^, R. Sharma. Research Policy, https://doi.org/10.1016/j.respol.2020.104128, 2020.

Abstract: “Using firm-level data from 2001 to 2016, this paper evaluates the impact of India’s R&D tax credit scheme and its 2010-11 reform on the innovation activity of the country’s private firms. Registration with the Department of Scientific and Industrial Research (DSIR) is a requirement for the R&D tax credit eligibility. Not all firms have registered with the DSIR by 2016 and those that did, vary by year of registration. In a difference-in-difference setting, we evaluate the change in innovation activity after the reform in DSIR-registered firms relative to non-DSIR-registered firms. We also study the timing of DSIR registration and examine how the changes in firm innovation activity following registration were impacted by the 2010-11 reform. Among firms first registered with the DSIR after the 2010-11 reform, we find a sharp increase in firm R&D expenditures, R&D intensity, and the number of patent applications filed at the Indian Patent Office following registration. The reform has also spurred innovation in firms registered with the DSIR in or before 2001. The results are not driven by unobserved cross-firm heterogeneity or firm-specific time trends.” [ABSTRACT FROM AUTHORS]

Immigrant entrepreneurs, technology transfer  and knowledge spillovers: The case of Lyon Barcelona (1933-1981)

By : M. Llonch-Casanovas. Business History, Volume: 62, Issue: 7, DOI: 10.1080/00076791.2017.1401065, 2020.

Abstract: “The study explores the key contributory factors in the success of immigrant entrepreneurs in disseminating technical knowledge in host economies. Based on a study of the Lyon Barcelona textile printing firm in Premia de Mar, we show how the introduction of screen printing in 1933 eventually stimulated the creation of a cluster specialised in the manufacture of printing moulds. The knowhow provided by the new technique was transferred from the factory itself and disseminated to new small businesses that were set up in and around the town of Premia. Thanks to the vision of an immigrant entrepreneur, who saw the potential of the new business inside the pre-existing industrial framework in Catalonia, and his close collaboration with local managers, this cross-border business initiative had a decisive impact on the host economy.” [ABSTRACT FROM AUTHOR]

Principles of value creation in event tourism:  Enhancing the competitiveness of regional clusters

By: Lee, Chung-Shing, M. Drew, H. Pi-Feng, Y. Wan Chen. Journal of Global Scholars of Marketing Science, Volume: 30, Issue: 4, DOI: 10.1080/21639159.2020.1784771, 2020.

Abstract: “Using a strategic management perspective, this paper conceptualizes how event tourism creates and appropriates value for locations and regions supporting tourism. A conceptual framework of the six principles of tourism value creation integrates theoretical developments in value creation and retention, service innovation, and networks and regional clusters. This model applies to three levels of players: individual entities, tourism-supporting organizations, and the geographic or regional clusters that promote tourism. This framework demonstrates how event tourism creates value for individual tourists, tourism-related organizations, and regional economies, while also enhancing competitiveness for regions and individual nations. The model offers a new perspective for future research directions and practitioner guidance to create and sustain competitive advantage.” [ABSTRACT FROM AUTHORS]