New Directions in Regional Economic Development

New Directions in Regional Economic Development

The Role of Entrepreneurship Theory and Methods, Practice and Policy

Edited by Sameeksha Desai, Peter Nijkamp and Roger R. Stough

The introduction of endogenous growth theory has led to new interest in the role of the entrepreneur as an agent driving technical change at the local regional level. This book examines theoretical and methodological issues surrounding the interface of the entrepreneur in regional growth dynamics on the one hand and on the other presents illuminating case studies. In total the book’s contributions amplify understanding of such critical issues as the relationship between innovation and entrepreneurship, the entrepreneur’s role in transforming knowledge into something economically useful, and knowledge commercialization with both conceptual and empirical contributions.

Chapter 5: The Design of Industrial Models: Addressing Cooperative Behaviours, Innovation and Public Policy

Maria Teresa de Noronha Vaz

Subjects: business and management, entrepreneurship, economics and finance, regional economics, urban and regional studies, regional economics


Maria Teresa de Noronha Vaz 5.1 INTRODUCTION Industrial development has resulted in many changes in the determinants of firm location. The classical approach explains changes that separate leading multinational companies from others and suggests labour savings, investment guarantees or human capital expertise as the main reasons for the more recent location choices of big firms. These changes represent group strategies that give rise to complex firm structures or geographic industrial patterns fixed by informally agreed-upon goals. In the cases of other small and medium-sized firms, locations are mostly dependent on the nature of the activity or sectoral branches they represent. Supply or demand constraints encourage, more or less, the entrepreneurial site of the production plant. Some industries do not conform to either the classical or the activity branch approach and are therefore called ‘footloose’. Even if the activity branches of the agro-food industry constitute good examples for observing such locational constraints, Connor and Schiek (1997) suggest that they are infrequently explained by simple supply or demand constraints. Following this line of thinking, this chapter is an exercise in searching for a new causal effect for firm location in the ways in which firm coordination occurs. The emphasis given to innovation shows the need to accept the increasing influence of a new industrial model based on flexible specialization that promotes interrelationships among firms. The lack of clear regulations may result in coordination forms that are neither equilibrated nor long-lasting. This being the case, regional production chains may be determined by the...

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