Operationalizing Interaction between Firms and Regions ()
ABSTRACT
Regions are very different as they contain an
amalgam of different resources shaped by a diversity of actors. In some extent,
they are the result of interactions of different actors that can be located
either inside or outside them. Firms are one of the actors that assume more
relevance for the regional configuration. Indeed firms have a capacity to act
beyond any regional boundaries and a successful firm can “infect”
positively the regional dynamics. But the opposite influence is also true. The
regional configuration may have
impact on the strategic action of firms. The interconnection
between firms and territories is thus a key issue for the understanding of the
development of both businesses and regions. However, the
interactions between firms and regions have not been sufficiently explained. In this context, the purpose of this paper is
to clarify the bidirectional influence between firms and regions. Taking advantage of the
emerging literature of relational geography and industrial network approach, a model aimed
at providing a better understanding of this mutual influence was developed. We find that the lack of
relational compatibility can limit firms’ effects on the region. Similarly, the
influence of the region on firms’ performance also depends on this compatibility and on the specific characteristics of the business actors.
Share and Cite:
Correia, R. and Brito, C. (2016) Operationalizing Interaction between Firms and Regions.
Theoretical Economics Letters,
6, 690-706. doi:
10.4236/tel.2016.64074.