Exploring evolutionary economic geographies

Evolutionary approaches in economics have gathered increasingsupport over the last 25 years. Despite an impressive body ofliterature, economists are still far from formulating a coherentresearch paradigm. The multitude of approaches in evolutionaryeconomics poses problems for the development of an evolutionaryeconomic geography. For the most part, evolutionary economicgeography imports selective concepts from evolutionary biologyand economics and applies those concepts to specific problemswithin economic geography. We discuss a number of problems withthis approach and suggest that a more powerful and appealingalternative requires the development of theoretically consistentmodels of evolutionary processes. This article outlines thecontours of an evolutionary model of economic dynamics whereeconomic agents are located in different geographical spaces.We seek to show how competition between those agents, basedon the core evolutionary principles of variety, selection andretention, may produce distinct economic regions sharing propertiesthat differentiate them from competitors elsewhere. These argumentsare extended to illustrate how the emergent properties of economicagents and places co-evolve and lead to different trajectoriesof economic development over space.     

Complexity thinking and evolutionary economic geography

Thus far, most of the work towards the construction of an evolutionaryeconomic geography has drawn upon a particular version of evolutionaryeconomics, namely the Nelson-Winter framework, which blendsDarwinian concepts and metaphors (especially variety, selection,novelty and inheritance) and elements of a behavioural theoryof the firm. Much less attention has been directed to an alternativeconception based on complexity theory, yet in recent years complexitytheory has increasingly been concerned with the general attributesof evolutionary natural and social systems. In this articlewe explore the idea of the economic landscape as a complex adaptivesystem. We identify several key notions of what is being calledthe new ‘complexity economics’, and examine whetherand in what ways these can be used to help inform an evolutionaryperspective for understanding the uneven development and adaptivetransformation of the economic landscape.     

Host economy impacts of transnational retail: the research agenda

The last decade has witnessed an acceleration of retail foreigndirect investment into a range of emerging markets across EastAsia, Central and Eastern Europe and Latin America, led by asmall cohort of food and general merchandise retailers fromWestern Europe, and to a lesser extent, North America. Whilethese investment flows have had profound developmental impactsin host economies, research in this area is still in its infancy.This article therefore maps out a detailed research agenda withrespect to the host economy impacts of transnational retailing.After setting the scene empirically and conceptually, the articleconsiders different dimensions of these impacts on retail competitiveness,supply chain dynamics, consumption practices and consumer/civilsociety, institutional and regulatory frameworks and, reciprocally,on the retail transnational corporations themselves. It concludesby calling for a concerted interdisciplinary research effortinto this important and understudied aspect of economic globalization.     

Oligopoly and the structural paradox of retail TNCs: an assessment of Carrefour and Wal-Mart in Japan

This research focuses on the case of international chains facingsignificant competition from domestic chains in advanced industrializedeconomies. In this article, I question the assumptions behindthe perceived, simultaneous process of globalization and retailconcentration by taking the cases of the world's two largestretailers, Wal-Mart and Carrefour, entering the Japanese marketin the early 2000s. Both retail TNCs have so far failed to meetinitial high expectations for their performance. I argue thatthere is a structural paradox inherent among retail TNCs, whichis expressed as contradictory forces between standardizationand localization. Empirical evidence is provided on how theseforces complicate retail TNCs’ front-end (store-front)and back-end (distribution) operations in the case of Japan.Emphasis is placed on the role of oligopoly in the retail sectorand how its absence affects retail TNCs’ operation inforeign markets.     

Barriers to 'US style' lean retailing: the case of Wal-Mart's failure in Germany

Wal-Mart's exit from the German market in 2006 after 10 yearsof attempting to achieve sustainable competitive advantage contributesan interesting case to the small but expanding literature on‘failure’ in international investment. The workon the disinvest decision in all its forms has been criticalto a re-conceptualization of the international investment processas dynamic rather than static, linear and inexorable. An importantsegment of the work on investment and disinvestment as dynamicprocesses focuses on the environment in which investment anddisinvestment decisions evolve. While the environment of thehost country market has begun to be examined, the market environmentof the country in which the retail transnational corporation(TNC) originates also affects the international disinvestmentprocess. To explore this ‘home country effect’,I examine the resources Wal-Mart brought into the German marketand their ability to use those resources in the German context.Wal-Mart's resources were shaped by the market governance regimein which the firm evolved, and not insignificantly, over whichit had and has influence. Within this theoretical frame, Wal-Mart'sreliance on the resources of network dominance and autonomousaction that made for its success in the USA contributed to unsuccessfulstrategies in the German retailing market.     

Positional issues, valence issues and the economic geography of voting in British elections

A body of research has built up in recent years linking thechanging geography of party support in British elections tovariations in the country's economic geography. Consistent withthe economic vote model, government support has been shown tobe higher than average in affluent areas and lower than averagein poorer areas. However, the great majority of such studieshave concentrated on elections between 1979 and 1997, a prolongedperiod of one-party rule. This article argues that this meansexisting research cannot differentiate between the very differentpredictions of positional and valence approaches to economicvoting since both suggest identical outcomes during Conservativeadministrations. By contrasting a period of Conservative rulewith a period of Labour rule, however, the article providesa test of the competing claims of the positional and valencearguments for an understanding of Britain's electoral geography.     

'Proactive fast-tracking' diffusion of supermarkets in developing countries: implications for market institutions and trade

Supermarkets have spread extremely rapidly in developing countriesafter the ‘take-off’ in the early to mid-1990s.Former analyses of supermarket diffusion have not adequatelyexplained the sudden burst and then exponential diffusion ofsupermarkets in the late 1990s and early 2000s. We argue thatrather than taking demand and market institutional and organizationalconditions as ‘exogenous’, as former analyses havetended to do, modern food retailers instead have treated localconditions as substantially ‘endogenous’. To enabletheir rapid growth, supermarkets undertake ‘proactivefast-tracking strategies’ to alter the ‘enablingconditions’ of entry and growth. Beside the retail investmentsthat have been extensively treated in recent literature, theseproactive strategies focus on improving the ‘enablingconditions’ via (i) procurement system modernization and(ii) local supply chain development. One important strategyretailers have used to facilitate (i) and (ii) is to form symbioticrelationships with modern wholesale, logistics and processingfirms. An example we address is ‘follow sourcing’,where a transnational retailer encourages transnational logisticsand wholesale firms with whom the retailer is working in homemarkets, to locate to the developing country. This is a spurto globalization of services in support of retail. Follow-sourcinghas been treated for example in the automobile manufacturessector (follow-sourcing from spare parts manufacturers)—butnot in the food sector. A second important strategy is thatof multi-network-sourcing, in which supermarkets source fromnational, regional and global networks. We analyze that strategyhere, adding to the literature which to date has touched onthis theme only scantly, and for the first time identify typicalpaths, present preliminary evidence (from Central America andIndonesia) concerning this multi-sourcing-network strategy anddiscuss trade implications. One of these is the move to primacyof South–South trade in supermarket sourcing—a newdimension of globalization. By introducing this link of retailertransformation and trade into the literature, we hope to spura new line of research that is timely in light of the trade,development and globalization debates in developing countries.     

Rethinking the regional knowledge production function

The knowledge production function is a questionable device foridentifying the determinants of commercial patenting. Adaptedfrom firm level analysis, it implicitly assumes that some mechanismexists to transfer research and development inputs across institutionsto maximize invention output. Augmenting the approach with regionalstructure variables risks confounding causes and effects, becausethese conditions determine research and development in the firstplace. We contrast a knowledge production function and a regionalstructure model to identify the determinants of commercial patentingin US states in the period 2002–2004. Results show thathuman capital, specialized knowledge flows, urbanization andindustry dominance in technical advance drive commercial patenting.     

Strategy as practice: interactive governance spaces and the corporate strategies of retail transnationals

There is growing interest in the role of corporate governancesystems within the strategy-making process of firms. Using a‘strategy as practice’ perspective, we conceptualizethe governance system as a contested space in which managementand security analysts mutually adapt/transform and enact corporatestrategies vis-à-vis argumentation. Synthesizing thismicropractice perspective within corporate governance research,the supple role of securities analysts’ arguments in shapingcorporate strategies assumes a new significance. It also providesa basis for observing and understanding the contested natureof the retail internationalization process. The implicationsand opportunities for management studies and economic geographyare considered.     

Spatial diversity in invention: evidence from the early R&D labs

This article uses historical data on inventor and firm researchand development (R&D) lab locations to examine the technologicaland geographic structure of corporate knowledge capital accumulationduring a formative period in the organization of United Statesinnovation. Despite the localization of inventive activity aroundthe labs, one-quarter of inventors lived outside a 30 mile commutingradius of the nearest facility of the firm they assigned theirpatents to. A strong positive effect of distance from a labon technological importance is identified, especially for inventorsfrom large cities that were geographically separated from afirm's; labs. A patent case–control method helps explainspatial sourcing by showing that the average quality of externallyavailable inventions was high. Firms selected complementary,not substitute, inventions from non-lab urban locations, suggestinga link between the organization and the geography of innovation.     

The far side of international business: local initiatives in the global workshop

This article presents a case study of the entry of two Norwegianlifeboat companies into the Chinese production system. Ratherthan merely studying the situation through the eyes of thesecompanies, it includes a perspective from the far side of internationalbusiness, i.e., the local competitors. The article argues thatto understand the dynamics and development of both internationalcompanies and localized production systems in a global economy,it is necessary to explore how international and local actorsreflexively evaluate and act upon each other. The article, thus,presents a model for studying the internationalization processand localized production systems.     

Scoping and conceptualising retailer internationalisation

The impacts and activities of international retailers have beenlargely ignored in the globalisation discourse. A possible reasonfor this is the absence, in international retailing, of conceptand theory that does not hang on the coat-tails of internationalproduction. The paper attempts to consider international retailingin its own right. Three linked questions are explored. Has theinternationalisation process of the large retailers resultedin an increase in the global concentration of sales? In whatways does the process of retailer internationalisation differfrom the internationalisation of production? What does the committedinternational retailer transfer to the host country during theinternationalisation process?     

Global sourcing: insights from the global clothing industry the case of Zara, a fast fashion retailer

Until recently, Zara, a major international clothing retailerand pioneer of ‘fast fashion’ principles, kept almosthalf of its production in Spain and Portugal, earning the reputationof being one of the exceptions to globalization. Since the 1980s,the existence of such exceptions has been fueling an expectationthat the production of high-quality fashion garments and tailoredsuits would remain in the industrialized core. Here I revisitthis expectation in the light of the current seminal changein the culture of fashion from ready-to-wear to fast fashion,and report that the increased variety and fashionability associatedwith fast fashion, represented by Zara, have tilted the balanceof competitive advantage towards, rather than away from, firmsin partially industrialized countries. As a number of supplierfirms in countries such as Morocco, India and Turkey have gainedthe competence to manufacture intricately worked high-qualitygarments with the required flexibility and speed, Zara has turnedto sourcing from these countries. It appears that instead ofZara changing the geography of jobs, the geography of competenciesand jobs has changed Zara.     

The supermarket revolution in developing countries: tidal wave or tough competitive struggle?

An extensive literature on the transformation of food retailingin developing countries by the expansion of supermarkets hashighlighted the implications of the concentration of food valuechains for the continued incorporation of small farmers in freshproduce supply. A critical examination of this literature showsthat extent of the transformation of retailing, and also offood production as a consequence of it, is overestimated, particularlyfor fresh produce. The future landscape of food retailing willbe more varied than the supermarket revolution hypothesis predicts.     

The territorial dynamics of innovation: a Europe United States comparative analysis

The United States and European Union differ significantly interms of their innovative capacity: the former have been ableto gain and maintain world leadership in innovation and technologywhile the latter continues to lag. Notwithstanding the magnitudeof this innovation gap and the political emphasis placed uponit on both sides of the Atlantic, very little systematic comparativeanalysis has been carried out on its causes. The empirical literaturehas emphasized the structural differences between the two continentsin the quantity and quality of the major ‘inputs’to innovation: R&D investments and human capital. The verydifferent spatial organization of innovative activities in theEU and the US—as suggested by a variety of contributionsin the field of economic geography—could also influenceinnovative output. This article analyses and compares a wideset of territorial processes that influence innovation in Europeand the United States. The higher mobility of capital, populationand knowledge in the US not only promotes the agglomerationof research activity in specific areas of the country but alsoenables a variety of territorial mechanisms to fully exploitlocal innovative activities and (informational) synergies. Inthe European Union, in contrast, imperfect market integrationand institutional and cultural barriers across the continentprevent innovative agents from maximizing the benefits fromexternal economies and localized interactions, but compensatoryforms of geographical process may be emerging in concert withfurther European integration.     

Agents of casualization? The temporary staffing industry and labour market restructuring in Australia

This article presents a study of the Australian temporary staffingindustry. It explores how temporary staffing markets are manufacturedthrough the interactions between industrial relations and regulatorysystems, on the one hand, and the structures and strategiesof domestic and transnational temporary staffing agencies onthe other. The article draws on secondary datasets and semi-structuredinterviews with government departments, labour unions, staffingagencies and their trade bodies to analyse the size, structureand characteristics of the Australian temporary staffing market.It argues that the Australian market differs in important waysfrom those other ‘neoliberal’ labour market regimes—suchas those in Canada, UK and USA—with which it is oftencompared. The article argues for an approach that seeks to explorethe (often gradual) mutual transformation of temporary staffingorganizations and the institutional and regulatory systems inwhich they are embedded, rather than privileging one at theexpense of the other.     

The effect of congestion and agglomeration on multifactor productivity growth in Dutch regions

It is well known that labour productivity growth in Europe isslowing down, against an increasing growth rate in the US. TheNetherlands is one of the countries in Europe with the lowestgrowth rates of productivity. This article looks at this phenomenonfrom a regional perspective and presents the results of a growthaccounting exercise applied to regional industry data of TheNetherlands between 1995 and 2002. We find that slow productivitygrowth in The Netherlands is particularly situated in the economiccore regions and is caused by slow multifactor productivity(mfp) growth. A substantial part of this slow mfp-growth canbe explained by the fact that positive agglomeration advantagesare overruled by negative congestion effects caused by trafficjams.     

Organisational geographies of corporate responsibility: a UK-US comparison of retailers' ethical trading initiatives

Ethical trade, involving corporate codes of conduct for sitesof production, has become a key means through which labour inretailers’ global supply chains is regulated. Yet, thereis evidence to suggest that retail corporations vary markedlyin their approaches to ethical trade and that such variationis shaped, in part, by the national-institutional contexts inwhich retailers are based. This article explores this insightby evaluating the distinct roles played by multi-stakeholderinitiatives for ethical trade in the UK and USA. While the UK'score multi-stakeholder initiative, the Ethical Trading Initiative(ETI), encompasses retailers from a variety of sectors and takesa developmental and continuous learning approach to ethicaltrade, the US multi-stakeholder initiatives are focussed moreon corporate accountability based on compliance monitoring exclusivelyin the clothing sector. Given recent organisational attemptsto foster transnational dialogue between multi-stakeholder initiatives,though, we argue that the precise ways in which national-institutionalcontexts shape retailers’ ethical trading approaches arefluid and mutable. We contribute to the literature on the governanceof global supply chains, retailer power and corporate responsibilityby emphasising the political significance of national-institutionalenvironments. However, in line with notions of relational economicgeography, we understand these national-institutional environmentsas active and dynamic contexts, and accentuate the coalitionalways in which nationally based organisations evolve in theirhome countries and go on to shape broader transnational agendasfor ethical trade.     

Localized mobility clusters: impacts of labour market externalities on firm performance

This article analyses the impact of labour market-induced externalitieson firm performance by using a unique database that connectsattributes of individuals to workplaces for the entire Swedisheconomy. Based on the analysis of 256,985 workplaces, our resultsshow that firms belonging to networks of local job mobility(i.e. ‘localized mobility clusters’) significantlyoutperform other similar firms within the local labour market.The results also indicate that concentrations of similar andrelated firms do not explain any considerable part of the variationsin firm competitiveness. Labour market externalities derivedvia local job mobility produce significantly more powerful effectsfor the involved firms as compared to the degree of co-location,diversity and scale.     

Urban growth drivers in a Europe of sticky people and implicit boundaries

We investigate urban GDP per capita growth across the EU12 usingdata for functionally defined cities—rather than administrativeregions. We test hypotheses on the role of human capital, EUintegration and fragmentation of urban government and explorespatial dependence and mechanisms of spatial interaction. Resultsare acceptable on standard econometric tests without measuresof spatial interaction but there is spatial dependence. If variablesreflecting spatial adjustment are included, they are statisticallysignificant and eliminate spatial dependence. Not only do theresults now provide consistent estimates of parameters, butthey also support relevant theoretical insights and show nationalborders are still significant barriers to economic adjustment.People in Europe are sticky so it is unreasonable to assumespatial disparities will disappear. Our findings also implythat cities in Europe form national rather than a single continentalsystem.