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Impacts of Multi-level Spatial Capital Resources on Business Performance

Karima Kourtit, Peter Nijkamp, Andrea Caragliu and Chiara Del Bo

Chapter Chapter 13 in Applied Regional Growth and Innovation Models, 2014, pp 313-334 from Springer

Abstract: Abstract Firms may be seen as critical change agents in any spatial system. Consequently, the recent regional growth literature has rightly positioned firms at the centre of regional dynamics (see e.g. Capello and Nijkamp 2010). Entrepreneurship and innovation have assumed a dominant position in regional development studies. The presence of entrepreneurs is however, a necessary, but not sufficient condition for regional economic progress. Clearly, macroeconomic conditions, such as the general level of development and growth, the availability of credit and demand conditions are crucial in determining the success or failure of an economic system. Even after taking into account these major forces, however, the relevance of the behavior and performance of entrepreneurs and firms for the well-being of cities, regions and countries remains paramount. A major question, thus, is how much firms contribute to regional well-being; in other words: what are their objectives and, ultimately, what is their performance? Firms’ performance, in a broad sense, is a multi-faceted concept and is influenced by conditions both internal and external to the firm. In an increasingly globalized and interlinked economy, firms, especially those with several plants, are operating in complex environments, and this should be reflected in any model attempting to unveil the determinants of performance. In the present study, we will argue that in the context of modern high-tech industries, a firm’s objective function and performance are determined by internal characteristics along with contextual conditions, at both the sectoral and spatial level. Therefore, we will first focus on the technological context and characteristics of the sector in which the firm operates, as this will directly influence its performance and goal-setting strategy. A firm’s success or failure is also related to the external environment in which it operates, as this reflects the set of institutional and social norms governing its operations and determines the potential quality of the workforce and market demand conditions. We will thus include in our analysis, along with firm-specific internal factors sectoral dummy variables, an evaluation of the role of social and human capital at the regional level and the impact of the urbanization structure in which the firm operates.

Keywords: Social Capital; Human Capital; Firm Performance; Business Performance; Revenue Growth (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:spr:adspcp:978-3-642-37819-5_13

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DOI: 10.1007/978-3-642-37819-5_13

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