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Spatial Proximity and Firm Survival in a Declining Industrial District: The Case of Knitwear Firms in Baden-Wu¨rttemberg

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Author Info
Udo Staber
Abstract

The literature on small firm networks in industrial districts postulates the importance of territorial proximity for business innovation and regional development, but empirical research to test this proposition is sparse. While there is some research on the extent of interfirm co-operation, little is known about the performance outcomes of co-operation. I develop competing hypotheses from institutional, ecological and random action theories concerning the survival chances of firms located in geographic proximity, and test them with data on the complete population of knitwear firms in Baden-Württemberg, Germany, for the period from 1960 to 1998. Proportional hazard estimates show that location in clusters of firms in the same industry increased business failure rates, and location in diversified clusters of firms operating in complementary industries reduced failure rates. The empirical results are most consistent with the ecological model of localized competition in resource environments. La documentation sur les réseaux de petites entreprises dans les districts industriels affirme l'importance de la proximité géographique pour ce qui est de l'innovation d'entreprise et de l'aménagement du territoire. Toujours est-il que la recherche empirique qui vient à l'appui de cette affirmation s'avère limitée. Alors qu'il y a de la recherche sur la portée du partenariat interentreprise, les résultats d'un tel partenariat sont plutôt inconnus. A partir des théories institutionnelles, écologiques et relatives au événements au hasard, on construit des hypothèses rivaux concernant le taux de survie des entreprises situées les unes près des autres. Employant des données allant de 1960 à 1998 et provenant du nombre total des fabricants de tricots situés dans la Baden-Württemburg, en Allemagne, on met les hypothèses à l'épreuve. Les estimations proportionnelles des risques montrent que la localisation des entreprises du même secteur en grappes augmente le taux de faillite, et que la localisation des entreprises des secteurs complémentaires réduit le taux de faillite. Les résultats empiriques correspondent au modèle écologique de la concurrence localisée en milieux caractérisés par la disponibilité des ressources. Die Literatur über Netzwerke von kleinen Firmen in industriellen Distrikten postuliert die Bedeutung der räumlichen Nähe für geschäftliche Innovation und Regionalentwicklung, doch empirische Untersuchungen zur Überprüfung dieser These sind rar. Es gibt zwar einige Arbeiten über das Ausmass der kooperativen Zusammenarbeit unter Firmen, doch wenige Studien über die Erfolgsergebnisse der Zusammenarbeit. Der Autor leitet aus institutionalistischen, ökologischen und Zufall basierten Theorien gegensätzliche Hypothesen bezüglich der Überlebenschancen von Firmen ab, deren Standorte sich in geographischer Nähe zu einander befinden, und überprüft sie mit Hilfe von Daten über die gesamte Population von Strickwarenunternehmen in Baden-Württemberg/Deutschland im Zeitraum 1960-1998. Proportionalitätsriskoschätzungen zeigen, dass Standorte in räumlichen Clustern von Firmen der gleichen Industriebranche die Häufigkeit von Firmenschliessungen steigerten, und dass Standorte in einem diversifizierten Cluster von Firmen in komplementären Industriezweigen die Rate der Schliessungen reduzierten. Die empirischen Ergebnisse stimmen weitgehendst mit dem ökologischen Modell örtlich beschränkten Wettbewerbs in Ressourcenumwelten überein.

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Article provided by Taylor and Francis Journals in its journal Regional Studies.

Volume (Year): 35 (2001)
Issue (Month): 4 (June)
Pages: 329-341
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Handle: RePEc:taf:regstd:v:35:y:2001:i:4:p:329-341

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Related research
Keywords: Industrial District Small Firm Network Geographic Proximity Business Survival Textile Industry District Industriel Reseaux De Petites Entreprises Proximite Geographique Survie Des Entreprises Industrie Du Textile Industrieller Distrikt Kleinfirmennetzwerk Geographische Nahe Firmenfortbestand Textili;

References listed on IDEAS
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  1. Ottati, Gabi Dei, 1994. "Trust, Interlinking Transactions and Credit in the Industrial District," Cambridge Journal of Economics, Oxford University Press, vol. 18(6), pages 529-46, December.
  2. Almeida, Paul & Kogut, Bruce, 1997. " The Exploration of Technological Diversity and the Geographic Localization of Innovation," Small Business Economics, Springer, vol. 9(1), pages 21-31, February. [Downloadable!] (restricted)
  3. Brusco, Sebastiano, 1982. "The Emilian Model: Productive Decentralisation and Social Integration," Cambridge Journal of Economics, Oxford University Press, vol. 6(2), pages 167-84, June.
  4. Henderson, Vernon & Kuncoro, Ari & Turner, Matt, 1995. "Industrial Development in Cities," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 1067-90, October. [Downloadable!] (restricted)
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  5. Bennett Harrison, 1992. "Industrial Districts: Old Wine in New Bottles?," Regional Studies, Taylor and Francis Journals, vol. 26(5), pages 469-483, January. [Downloadable!] (restricted)
  6. Rolf Sternberg, 1999. "Innovative Linkages and Proximity: Empirical Results from Recent Surveys of Small and Medium Sized Firms in German Regions," Regional Studies, Taylor and Francis Journals, vol. 33(6), pages 529-540, August. [Downloadable!] (restricted)
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