The Role of Local Institutions as Intermediary Agents in the Industrial District

Abstract

This paper proposes a theoretical integration of both social capital and territorial perspectives for the study of industrial districts and their implications for individual firms. As a result of this integration, an industrial district can be identified as a network of dense and strong ties. According to this description, industrial districts benefit from fine-grained and tacit knowledge exchanges and from norms and values promoting cooperative strategies. Consequently, these characteristics benefit individual firms for the exploitation of existent technologies and opportunities. However, using the same logic, these characteristics might not be suitable for exploring new technologies and opportunities. Nevertheless, we suggest that proximity facilitates the creation of third-party relationships, such as those between firms and regional institutions or other regional intermediaries. These institutions provide individual firms in the district with indirect links to sources of knowledge from outside the district, as well as from within it, thus benefiting firms from structural holes that are not available to other individual firms that do not operate in the district. In order to give support to our theoretical argument we examine the Spanish ceramic tile industrial district and focus on the role played by the Institute of Ceramic Technology as an illustrative case.