Emerging Districts Facing Structural Reform: The Madrid Electronics District and the Reshaping of the Spanish Telecom Monopoly

Ruth Rama and Deron Ferguson
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Deron Ferguson: Department of Geography, University of Washington, Seattle, WA 98195, USA

Environment and Planning A, 2007, vol. 39, issue 9, 2207-2231

Abstract: In this paper we identify some sources of resilience in regional production districts (RPDs) faced with external shocks. We analyze Madrid's electronics district, which has managed to survive and prosper even after the turbulent period of the early 1990s when Spanish telecommunications services and product markets were liberalized. The study of structural changes alone in RPDs as they respond to external shocks may not sufficiently account for other important sources of some districts' resilience. Also playing important roles may be the conscious strategies of districts' leading firms. We study changes occurring after shock with quantitative data coming from surveys performed before and after telecommunications reform was implemented. Most other recent studies of change in RPDs compare instead the current situation with a qualitative description of the previous situation. We also build on previous empirical work, provide recent regional statistics, and compile information from the daily business press published over more than a decade. Anticipating the end of its various monopolies well in advance, the Spanish carrier Telefónica began searching for new growth opportunities as early as the mid-1980s. With Madrid's electronics district having evolved from a state-anchored district to an emerging high-technology district, Telefónica benefited from its production and development linkages there which confered a competitive advantage in winning foreign markets, especially in Latin America. Since the crisis, a process of reagglomeration has occurred in the district. Several large multinational suppliers of telecom equipment have relocated some of their production to Madrid and assigned greater importance to their R&D laboratories there.

Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:sae:envira:v:39:y:2007:i:9:p:2207-2231

DOI: 10.1068/a38270

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