Firms as drivers of integrative adaptive regional development in the context of environmental hazards in developing countries and emerging economies – A conceptual framework

Many industrial sites in developing countries and emerging economies face increasing exposure to environmental hazards, e.g. in coastal locations, while being situated within the territory of state authorities which lack in capacity to provide adaptation solutions. It is therefore relevant to ask, whether and how firms engage in adaptation, both individually and collectively, in order to reduce business disruptions, enhance their competitiveness and shape regional development. However, the literature has made little efforts to address these questions conceptually and empirically. The paper therefore develops a heuristic conceptual framework for deciphering the decision-making of firms exposed to environmental hazards and the role that they might play for shaping larger risk governance and eventually regional adaptation. In doing so, the paper builds on both an explorative empirical study in Jakarta and Semarang and the assessment of different literatures of relevance to the topic. The proposed framework argues that firms potentially fulfill a twofold role in shaping integrative adaptive regional development when exposed to environmental hazards. First, firms seek to enhance their own competitiveness through adjustments which are determined by their routines, risk behavior and the institutional setting. Second, firms act as stakeholders within broader collective adaptation. In conclusion, the framework suggests that firms’ (in-)actions can shift the trajectories of regional development into different directions, along a gradient from collapse, resistance, resilience to transformation. The framework can be used to guide empirical analysis and inspire policy making and practice of integrated adaptation governance, especially in rapidly changing developing countries and emerging economies.