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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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  • 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-Wurttemberg, 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 reseaux de petites entreprises dans les districts industriels affirme l'importance de la proximite geographique pour ce qui est de l'innovation d'entreprise et de l'amenagement du territoire. Toujours est-il que la recherche empirique qui vient a l'appui de cette affirmation s'avere limitee. Alors qu'il y a de la recherche sur la portee du partenariat interentreprise, les resultats d'un tel partenariat sont plutot inconnus. A partir des theories institutionnelles, ecologiques et relatives au evenements au hasard, on construit des hypotheses rivaux concernant le taux de survie des entreprises situees les unes pres des autres. Employant des donnees allant de 1960 a 1998 et provenant du nombre total des fabricants de tricots situes dans la Baden-Wurttemburg, en Allemagne, on met les hypotheses a l'epreuve. Les estimations proportionnelles des risques montrent que la localisation des entreprises du meme secteur en grappes augmente le taux de faillite, et que la localisation des entreprises des secteurs complementaires reduit le taux de faillite. Les resultats empiriques correspondent au modele ecologique de la concurrence localisee en milieux caracterises par la disponibilite des ressources. Die Literatur uber Netzwerke von kleinen Firmen in industriellen Distrikten postuliert die Bedeutung der raumlichen Nahe fur geschaftliche Innovation und Regionalentwicklung, doch empirische Untersuchungen zur Uberprufung dieser These sind rar. Es gibt zwar einige Arbeiten uber das Ausmass der kooperativen Zusammenarbeit unter Firmen, doch wenige Studien uber die Erfolgsergebnisse der Zusammenarbeit. Der Autor leitet aus institutionalistischen, okologischen und Zufall basierten Theorien gegensatzliche Hypothesen bezuglich der Uberlebenschancen von Firmen ab, deren Standorte sich in geographischer Nahe zu einander befinden, und uberpruft sie mit Hilfe von Daten uber die gesamte Population von Strickwarenunternehmen in Baden-Wurttemberg/Deutschland im Zeitraum 1960-1998. Proportionalitatsriskoschatzungen zeigen, dass Standorte in raumlichen Clustern von Firmen der gleichen Industriebranche die Haufigkeit von Firmenschliessungen steigerten, und dass Standorte in einem diversifizierten Cluster von Firmen in komplementaren Industriezweigen die Rate der Schliessungen reduzierten. Die empirischen Ergebnisse stimmen weitgehendst mit dem okologischen Modell ortlich beschrankten Wettbewerbs in Ressourcenumwelten uberein.

Suggested Citation

  • Udo Staber, 2001. "Spatial Proximity and Firm Survival in a Declining Industrial District: The Case of Knitwear Firms in Baden-Wu¨rttemberg," Regional Studies, Taylor & Francis Journals, vol. 35(4), pages 329-341.
  • Handle: RePEc:taf:regstd:v:35:y:2001:i:4:p:329-341
    DOI: 10.1080/00343400125106
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