Indigenous lead firms in rural regions: geography of global production networks revisited

Abstract

ABSTRACT This paper examines regional distribution of indigenous lead firms in global production networks (GPNs). The paper triangulates unique evidence at the firm-level from a large innovation survey, extensive field interviews and detailed case studies in Czechia. The results indicate that lead firms are not predominantly urban species, as often assumed in the literature, but tend to be located to a surprisingly high extent in rural areas. Nevertheless, rural lead firms differ significantly from the urban ones in many respects. Urban regions turn out to be a seedbed for young, ambitious, close to the market and networked lead firms in new industries, which conforms to typical urbanization economics in action, whereas rural regions tend to harbor mature, established and relatively self-reliant lead firms with strong technical know-how in traditional industries, which build on location-specific resources and traditions. The results call for a more nuanced view on the coupling between GPNs and location advantages and more granular take on the regional dimension of innovation policy.