Intermediaries in Regional Innovation Systems: High-Technology Enterprise Survey from Northern Finland

Intermediaries play an important role in national as well as in regional innovation systems, especially in innovation policy. In linking organizations within an innovation system, intermediaries are focusing on technology transfer, commercialization of ideas and funding. This research focuses on the role of intermediaries in high-technology product development in northern Finland. Based on a survey of 168 high-technology enterprises, funding services are regarded as the most important activity of intermediaries. Our results show that finance matters: a key actor within the Finnish innovation system in terms of direct funding and indirect collaborative resourcing, the Finnish Funding Agency for Technology and Innovation (TEKES), is considered the most important public sector organization in private sector product development. The survey also reveals that growth-driven companies with emphases on product innovation and high levels of investment in research and development for increasing their annual turnover benefit the most from intermediaries.     

Market Potential,Productivity and Foreign Direct Investment: Some Evidence from Three Case Studies

This paper aims at analysing the importance of local determinants to foreign direct investment (FDI) in three European regional case studies. The originality of the approach lies in the use of disaggregated data by sector and by region. The results are three-fold. First, regional demand and productivity are fundamental FDI determinants, confirming most studies with national data. Second, regional FDI inflows are more dependent on regional than national determinants. Finally, the effect of market potential measured with absolute gross domestic product (GDP) on regional FDI diminishes linearly with distance and does not when measured with GDP per capita.     

A SPATIAL ANALYSIS OF SECTORAL VARIATIONS IN RETURNS TO EXTERNAL SCALE

ABSTRACT.  This paper reports results of spatially explicit analyses of external scale effects across a variety of sectors, including manufacturing. Using data from New England counties, earnings are found to exhibit increasing returns to urbanization in every sector. Returns to sectoral localization are mixed, however, with increasing returns in one sector, constant returns in five sectors, and decreasing returns in two sectors. External scale effects are fairly confined in their spatial extent, with only retailing and services particularly marked by spillover effects from neighboring counties.     

Information Age Ireland: The Attraction,the Reality and Never Ending Geography

This paper is an attempt to probe deeper behind the well-documented success story of the Irish economy over the 1990s. Over the decade, the country experienced unparalleled levels of economic growth that saw unemployment levels plummet, inflation levels stabilize and inward investment rise at a substantial rate. Growth rates of gross national product (GNP) best surmise the Irish case, the tigerish performance brought the country from one with a per capita GNP two-thirds of the European Union (EU) average in 1987, to one which exceeded the average 10 years later. An exposition of Ireland's pursuit of a foreign direct investment (FDI) development model forms a major part of this work. Recognizing the importance of FDI in Ireland, and FDI in the software sector in particular, this paper shows how and why investors flocked into the country over the golden era of the 1990s. Exogenously, Ireland's place on the outskirts of one of the world's biggest markets made it an alluring option for outside investors. Endogenously, the rationale behind the pursuit of high-tech FDI policy, beyond employment creation was the expected spill-over effects of multinational companies (MNCs) on the local economy. Questions are asked about the nature of positive externalities both in terms of the growth of an indigenous sector alongside a foreign-owned one as well as the sustainability of this type of investment. Changes in the organizational structures of MNCs over the 1990s, through decentralization of activities and outsourcing are integral to the Irish success story. Organizational transformation resulting in networks of global production have helped Ireland, as a peripheral region, to reposition itself as an access point to the lucrative European market. The geographic alteration on the national level however, has not been recreated on the sub-national scale. Contrary to the writings of many technology determinists, Ireland's pursuit of an information economy has had a very real impact in terms of regional economic divergence within the country. The lack of coherent regional or spatial planning is to blame along with a telecommunications infrastructure that has exacerbated the regional woes of an economy with an explicit focus on high-technology industries.     

THE IMPACT OF SPECIFIC-SECTOR CHANGES IN EMPLOYMENT ON ECONOMIC GROWTH, LABOR MARKET PERFORMANCE AND MIGRATION

ABSTRACT.  It is common in empirical regional economics to use total employment as an explanatory variable while investigating issues such as the level and distribution of income and migration. This paper argues that sector-specific changes in employment and labor market performance can have different effects on economic growth, the collection of tax revenue, migration, and the level and distribution of household income. As such, it is important to model sectors separately. We find that expansions in employment opportunities for a high-wage sector such as computer manufacturing or bioengineering, a medium-wage sector manufacturing, and the lower-wage sector of retailing have differing economic consequences for a small city. We use a data intensive computable general equilibrium model to obtain these results.     

Foreign Direct Investment in a Recent Entrant to the EU: The Case of the Automotive Industry in Romania

A U.S.-based geographer presents the results of a survey of car and parts manufacturers in Romania with a focus on the role of foreign direct investment in the restructuring of the sector. Using a questionnaire and personal interviews, the author investigates and identifies the main factors attracting foreign automakers to Romania, which experienced a difficult transition after the collapse of the country's command economy and the ensuing loss of automotive exports to the neighboring states of CMEA. The paper covers the development of foreign ownership of vehicle assembly and car parts manufacturing plants, as well as the effects of foreign investment on Romania's national and local economies. Journal of Economic Literature, Classification Numbers: D20, F21, L62. 1 figure, 2 tables, 68 references.     

Changes in Land-Use Preferences of Small-, Medium- and Large-Scale Industries Located in Metropolitan Areas (Case Study in Istanbul)

In metropolitan areas, the changing spatial land-use preferences of the industrial sector are the most important determinants in the forming of the macro-form. Metropolitan areas, especially in developing European and Asian countries, become troubled cities with agglomerations of population and investment as a result of failures to apply satisfactory macro-policies and plans throughout the country. Industrial investments on various scales and the land-use preferences of investors have changed over time. The land preferences of production and headquarters of the manufacturing sectors have become basic determinants in the formation of settlement systems due to the transformations that occur alongside technological, economic and social development. This article examines whether or not the basic land-use criterion of the manufacturing sector changes in small-, medium- and large-scale businesses according to their labour structure, defined through an examination of the sectoral structure and relations of scale. Taking the increasing rate of the Gross National Product of the industrial sector in metropolitan areas in every country into account, and examining the land-use preferences of various industrial sub-sectors and scales will serve as an important input when making new planning decisions. The industrial land-use criterion will be effective in the transformation, reorganization or directing of new focuses for the agglomerated industrial structure, especially in Istanbul, which features both Asian and European metropolitan area characteristics. This article will define the existing industrial structure of the Istanbul metropolitan area; and differences between the various scales of land-use preferences within industrial investments will be presented, based on the findings of two investigations carried out over a 5-year period. Several important criteria for industrial investors seeking to establish themselves in metropolitan areas will be determined in the article.     

Canadian foreign direct investment in the United States by type: mergers and acquisitions, greenfield, real estate, joint ventures and investment increases

This paper provides an overview of Canadian foreign direct investment (FDI) in the United States by type. Mergers and acquisitions (M&As), greenfield investments, joint ventures, real estate purchases and increases to existing investments are compared spatially, through time (using a data set that consists of transactions from 1977 to 1994) and by industrial classification. Over this study's time-frame, direct investors from Canada were most likely to perform a real estate or M&A transaction in the United States (and least likely to be involved in a joint venture). The most consequential years for real estate purchases were the 1970s and early 1980s; whereas M&A and greenfield transactions have gained in proportionate importance through time. M&As, greenfield and investment increases were most often enumerated as manufacturing transactions, but mining and consumer and business services were also very common. A series of bivariate regression models established that growing state economies significantly increased M&A, real estate, greenfield and investment increase activity from Canada. Relative regional specializations (as given by location quotients) provided additional spatial information. M&As formed a pattern of specialization that emphasized the Great Lakes region and also the central portion of the US (roughly following the Mississippi River). Greenfield and investment increase transactions favoured states along the east coast and those adjacent to the Canada-US border. Real estate investors were most attracted to the US south and extreme west.     

Advanced manufacturing as an online case study for global geography education

Advanced manufacturing continues to be an important sector for emerging and industrialized economies, therefore, remaining an important topic for economic geography education. This article describes a case study created for the Association of American Geographer's Center for Global Geography Education and its implementation. The international machine tool industry is particularly useful for introducing students to the regional impacts of broader economic processes.     

The New Museum Folkwang in Essen. A Contribution to the Cultural and Economic Regeneration of the Ruhr Area?

Abstract

The “Bilbao effect” shows that major cultural investments can contribute to the regeneration of old industrial cities and regions. Four different contributions can be distinguished: the (1) direct economic effects of such an investment; (2) social functions of a cultural institution which often serves as a point of contact for local and regional elites; (3) symbolic functions as an expression of a new regional identity and (4) cognitive functions, for example, the contribution to regional diversity and the cross-fertilization of ideas. Taking the example of a major cultural investment in Germany, namely the renovation of Museum Folkwang prior to the European Capital of Culture RUHR.2010, this article discusses the economic, social, symbolic and cognitive contributions of this investment to the economic transformation of the town and the Ruhr area, which is now one of the largest urban agglomerations in Europe. A Bilbao effect was not intended and did not take place. The museum, however, contributed to the incremental transformation of the town by creating a different image of the town, its role as a meeting place and point of identification for local elites and companies and its contribution to the emergence of an integrated cultural district.     

Emergence of the American manufacturing belt: an interpretation

This study proposes that the American manufacturing belt emerged during the antebellum years as a replicated set of regional industrial systems. A broad-based set of demands spurred the growth of regional manufactures, including the pivotal producer durables sector. Eastern regions industrialized first, and they were followed by frontier regions in the Midwest. The relative importance of regional market manufactures declined over time and multiregional/national market manufactures increased. Regional industrial systems became increasingly specialized; the result was higher levels of interregional trade in industrial specialties. The decline of regional market manufactures eroded the bases for the emergence of regional industrial systems by the 1860s. The westward spread of the manufacturing belt ended, and internal differentiation and structural change within the belt were characteristics of late nineteenth century industrialization. The South failed to join the manufacturing belt during the antebellum years because regional demands for manufactures were insufficient to support important regional industrial systems. It lacked the bases to participate significantly in late nineteenth century industrialization.     

Russia's Inward and Outward Foreign Direct Investment: Insights into the Economy

A prominent British economist reviews the recent growth, partner-country composition, and sector composition of foreign direct investment in and out of Russia from a comparative international perspective, based on UNCTAD and Central Bank of Russia data as well as selected case studies. Two hypotheses are tested: that foreign policy significantly affects the host-country pattern of Russia's outward foreign direct investment (OFDI) and that domestic institutions significantly impact the host-country pattern of Russia's OFDI and the sectoral pattern of its inward foreign direct investment (IFDI). Quantitative evidence of foreign-policy influence could not be found, while domestic institutional influences do appear to be present, most notably in the form of system-escaping OFDI.     

Twenty‐first Century Industrial Policy in a Small Developing Country: The Challenges of Reviving Manufacturing in Rwanda

The Rwandan government — widely lauded for its political commitment to development — has refocused its efforts on reviving growth in the manufacturing sector. This article examines how pressures from different levels — international, regional and domestic — have shaped the evolving political economy of two priority sectors (apparel and cement). To achieve its goals of manufacturing sector growth, the Rwandan government aims to access foreign markets (on preferential terms) and larger regional markets while developing effective state–business relationships with locally based firms. Despite the government's political commitment to reviving its manufacturing sector, its strategy has been both shaped and impeded by shifting pressures at the international level (through Rwanda's recent suspension from the African Growth and Opportunity Act), the regional level (through competition from regional firms) and the domestic level (through over‐reliance on single firms). Within the current industrial policy literature, there is limited reflection on how developing countries are dealing with the multi‐scalar challenges of enacting industrial policy in a much‐changed global trading environment. This article contributes to the industrial policy literature by addressing this lacuna.     

Technological Maturity and Development without Research: The Challenge for Malaysian Manufacturing

Propelled largely by direct investment via multinationals, Malaysia’s manufacturing sector has grown rapidly and is changing its output‐mix. In 1992, the share of high‐tech products in Malaysian manufacturing exceeded that of Japan, Korea or Taiwan. However, this ‘maturity’ was acquired without a strong research base. This article provides a framework which looks at the role of research and development (R&D) in conferring technological maturity and assesses the progress Malaysian manufacturing has made in this regard. The authors find that while multinationals have transferred many aspects of production, they have been slow in transferring R&D expertise. Neither has indigenous innovation filled this gap. Consequently, the long‐term sustainability of the industrial transformation process in Malaysia is in jeopardy. The article concludes with suggestions for corrective policies.     

Engaging with Economic Geography in the ‘Real’ World: A Central Role for Field Teaching

Debates concerning how to engage students with economic geography have ignored the important role of field teaching. This paper argues that fieldwork must remain a key component of economic geographical teaching and that it offers a variety of advantages to overcoming student disinterest in the sub-discipline. It goes on to argue that field teaching must be developed, not neglected, in economic geography and illustrates its pedagogical advantages with reference to the example of a field class in north-east England.     

高速铁路对中国城市产业结构的影响研究

交通是影响城市产业发展的重要因素,高铁作为一种新型交通工具必将对城市产业发展产生影响。修正市场潜力模型分析高铁对中国城市产业结构的影响。结果表明：①总体上,高铁提升了城市服务业的比重,降低了城市制造业的比重;制造业型城市和服务业型城市的服务业比重都得到提升,制造业比重都下降;从单个城市来看,高铁提升了大多数制造业型城市和大多数服务业型城市服务业的比重。②对于制造业型城市的产业结构升级,高铁主要促进该类城市一般服务业比重的提升;对于服务业型城市的产业结构强化,高铁主要促进这些城市高端服务业比重的提升。③高铁的开通增强了中心城市的溢出效应,促进了中心城市及其周边城市的产业结构升级。     

Inter-Firm Linkages and Regional Impact of Transnational Corporations: Company Case Studies from Shanghai, China

By undertaking two company case studies in Shanghai, this article reveals that the actual regional impact of direct investment from TNCs is much greater than FDI data themselves may indicate. Such impact extends far beyond foreign invested enterprises (FIEs) as well as the invested regions. The joint venture with the local side controlled by a regional government tends to have fewer suppliers from other regions than the other with the local side owned by a state ministry. Through the extensive linkage networks with FIEs, industrial growth, technology transfer, management improvement and job creation have been indeed spread over many domestic enterprises. The government in the relevant region should employ proper measures to develop these linkages, especially in regions that have difficulties in attracting TNC investment. The two companies studied mirror the general situation in the automotive and the electronics industries, respectively. Further study on the indirect supply linkages with FIEs appears inviting.     

Profitability or Industrial Relations: What Explains Manufacturing Performance across Indian States?

This article begins with a critique of the well-known claim by Besley and Burgess concerning the negative impact of labour regulation on organized sector manufacturing performance in India. In the second part of the article, the authors use a state-level panel data set for the period 1969–2005 to analyse the relative importance of profitability (rate of profit as a percentage of the total replacement cost of capital stock) and industrial disputes (man-days lost to all industrial disputes as a percentage of total workers employed) to explain cross-state variations of manufacturing performance in India's organized sector. Using three different measures of manufacturing performance — net value added, investment and employment — they find that profitability is more significant than industrial disputes in explaining the variation of manufacturing sector performance across Indian states. The findings presented here therefore question the uncritical acceptance of Besley and Burgess's results in the literature on labour regulation.     

TOTAL FACTOR PRODUCTIVITY GROWTH IN MANUFACTURING FURTHER EVIDENCE FROM THE STATES*

In this paper, we first develop a measure of total factor productivity (TFP) growth and summarize a source-of-growth analysis for the manufacturing sector of 48 states. As have others, we find little association between TFP growth differentials and output growth differentials for census regions. At the staterather than the regional level, however, we find a positive association between TFP growth and output growth. We use cross-sectional data to estimate the determinants of the variation in TFP growth. Two results emerge that are important for regional policy and for understanding national productivity trends. First, state investments in education and in transportation infrastructure may affect TFP growth. Second, energy price increases in the early 1970s had no differential effects on productivity growth across states. We also explore the determinants of manufacturing output growth and find that TFP growth, demand growth, wage growth, wage levels, and state corporate income tax rates are significant.     

The Importance of Creative Industry Agglomerations in Explaining the Wealth of European Regions

This paper examines the existence of regional agglomerations of manufacturing, service and creative industries, the relationship between these industries and the wealth of regions and their industrial structure. Through an analysis of 250 European regions, three important conclusions can be inferred from the results obtained in this paper. The first is that creative industries play an important role in the wealth of a region. The second is that the most creative regions are characterized by having more high-tech manufacturing industries than the rest of the regions although the number of low-tech manufacturing firms is similar. Lastly, the industrial structure of each region has a greater influence on regional wealth than the existence of industrial agglomerations. The importance of this paper resides in the fact that up until now no analysis has demonstrated that creative industries are the most important industries in regional wealth.