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Competition and Cooperation in the Small Firm Sector

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  • Christine Oughton
  • Geoff Whittam

Abstract

This paper examines the nature of economies of scale in the small firm sector and aims to provide new insight into the economic efficiency of small firm industrial districts. The theoretical analysis identifies the role played by collective external economies of scale that are realised through cooperation over input activities. Using game theory it is shown that cooperation can emerge both as a result of rational profit maximising behaviour and as a result of institutional and cultural environments that encourage cooperation and trust. The implications for industrial policy are discussed in the concluding section.

Suggested Citation

  • Christine Oughton & Geoff Whittam, 1997. "Competition and Cooperation in the Small Firm Sector," Scottish Journal of Political Economy, Scottish Economic Society, vol. 44(1), pages 1-30, February.
  • Handle: RePEc:bla:scotjp:v:44:y:1997:i:1:p:1-30
    DOI: 10.1111/1467-9485.00042
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    Cited by:

    1. Toms, Steven, 2005. "Financial control, managerial control and accountability: evidence from the British Cotton Industry, 1700-2000," Accounting, Organizations and Society, Elsevier, vol. 30(7-8), pages 627-653.
    2. David B. Audretsch & Martin A. Carree & Adriaan J. Van Stel & A. Roy Thurik, 2002. "Impeded Industrial Restructuring: The Growth Penalty," Kyklos, Wiley Blackwell, vol. 55(1), pages 81-98.
    3. Steven Toms & John Wilson, 2012. "Revisiting Chandler on the Theory of the Firm," Chapters, in: Michael Dietrich & Jackie Krafft (ed.), Handbook on the Economics and Theory of the Firm, chapter 22, Edward Elgar Publishing.
    4. Viladecans-Marsal, Elisabet, 2000. "External Economies And Location Of Industrial Activities. An Analysis Of The Spanish Case," ERSA conference papers ersa00p95, European Regional Science Association.
    5. Paul Bishop, 2003. "Collaboration and firm size: some evidence from the UK defence industry," Applied Economics, Taylor & Francis Journals, vol. 35(18), pages 1965-1969.
    6. Cainelli, Giulio & Mancinelli, Susanna & Mazzanti, Massimiliano, 2005. "Social Capital, R&D and Industrial Districts," AICCON Working Papers 17-2005, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.
    7. Iwona Borowik, 2014. "Knowledge Exchange Mechanisms and Innovation Policy in Post-Industrial Regions: Approaches of the Basque Country and the West Midlands," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 5(1), pages 37-69, March.
    8. Hsini Huang, 2020. "The effect of the small-firm dominated ecology on regional innovation," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 65(3), pages 703-725, December.
    9. Edward Feser, 2004. "Agglomeration, Enterprise Size, and Productivity," Working Papers 04-15, Center for Economic Studies, U.S. Census Bureau.
    10. Karl Aiginger & Susanne Bärenthaler-Sieber & Johanna Vogel, 2015. "Competitiveness of EU versus USA. WWWforEurope Policy Paper No. 29," WIFO Studies, WIFO, number 58553, February.
    11. Jaime Alberto Rendón Acevedo, 2010. "Industrialización y dinámicas espaciales en Bogotá: las urgencias de gestión territorial," Revista Semestre Económico, Universidad de Medellín, September.
    12. Mike Danson & Geoff Whittam, 1998. "Clustering, innovations and trust: the essentials of a clusters strategy for Scotland," ERSA conference papers ersa98p387, European Regional Science Association.
    13. Karl Aiginger, 2006. "Competitiveness: From a Dangerous Obsession to a Welfare Creating Ability with Positive Externalities," Journal of Industry, Competition and Trade, Springer, vol. 6(2), pages 161-177, June.
    14. María Alderete & Miguel Bacic, 2012. "The impact of inter-firm networks on regional development: the case of Mendoza’s wine cluster," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 76, pages 177-213.
    15. Bellandi, Marco, 2000. "Local Development, Big Firms And Social Capital," ERSA conference papers ersa00p380, European Regional Science Association.
    16. Hsini Huang, 0. "The effect of the small-firm dominated ecology on regional innovation," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 0, pages 1-23.
    17. Cainelli, Giulio & Mancinelli, Susanna & Mazzanti, Massimiliano, 2007. "Social capital and innovation dynamics in district-based local systems," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 36(6), pages 932-948, December.
    18. Mark Freel & Richard Harrison, 2006. "Innovation and cooperation in the small firm sector: Evidence from 'Northern Britain'," Regional Studies, Taylor & Francis Journals, vol. 40(4), pages 289-305.
    19. Karl Aiginger & Susanne Bärenthaler-Sieber & Johanna Vogel, 2013. "Competitiveness under New Perspectives. WWWforEurope Working Paper No. 44," WIFO Studies, WIFO, number 47019, February.
    20. Freel, Mark S., 2003. "Sectoral patterns of small firm innovation, networking and proximity," Research Policy, Elsevier, vol. 32(5), pages 751-770, May.

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