Institutional Proximity Research Articles

Portfolio location-related decisions: do proximities matter?

PurposeThis paper aims to examine the relationships between how family owners perceive different aspects of proximity to their territory of origin and the location-related decisions of family business portfolios.Design/methodology/approachBy using the data collected from 112 family business portfolios (FBP), the authors carry out an empirical analysis to test the proposed hypotheses. The results are robust across a battery of robustness analyses performed by the authors.FindingsThe analysis reveals a heterogeneous relationship between the different dimensions of proximity and the maintenance and location of portfolio business units. Specifically, we reveal that entrepreneurial families’ social and institutional proximities to their founding territory have a positive influence on their decisions related to investing and maintaining their business portfolio.Originality/valueThese findings open the black box of how business decisions are affected by how business owners perceive their contexts, providing new insights into how corporate decisions in understudied business organisations, business groups, are shaped by the ownership’s proximity to territories.

Sustainable energy transition, knowledge co-creation and trade: the case of EU residential energy efficiency

ABSTRACT The European Union (EU) sustainable energy transition requires radical changes of economic, technological, societal and political systems. This paper empirically investigates the relationships among environmental policy, innovation and technological capabilities, and economic performances, in terms of country export competitiveness, focusing on residential energy efficiency goods, a core pillar of the EU energy and climate strategy. We combine network analysis with a gravity model to investigate the evolution of the EU bilateral trade and co-patenting activities from 1990 to 2015, based on a panel of 19 European countries. Our results show that the technological skills of the exporting country, related to the production of the households’ energy-consuming appliances, strongly enhance its export performances, and this effect is stronger when countries are EU members. Cooperation in knowledge creation and institutional proximities between trade partners are further key determinants of export performances of analysed countries.

From Protectionist to Regulator: Policy-Driven Transformation of Digital Urban Networks in China’s Online Gaming Industry

In the digital era, data-driven production organizes digital urban networks. This study explores the critical role of government policies in shaping these networks, focusing on China’s evolving policy contexts. While existing research has mainly emphasized qualitative analyses, this paper quantitatively assesses the impact of policy changes on digital urban networks, specifically through the lens of China’s online gaming industry. The study aimed to elucidate the relationship between the policy environment and digital urban networks. By examining China’s transition from protectionist to regulatory policies, this research employed a social network analysis and valued exponential random graph models (ERGMs) across two key phases: the competitive protection phase (2014–2017) and the systematic regulatory phase (2018–2022). The findings revealed a significant transformation in urban network structure, shifting from a centralized model dominated by a few core cities to a decentralized, multi-centered network. The key factors influencing this evolution include the institutional proximity and cross-regional collaborations. This study offers valuable insights into how policy shifts affect urban networks in the digital economy, contributing both theoretically and practically to future policy design.

Work together, walk forward: Unveiling collaborative innovation networks and mapping paths to breakthrough innovation in electric vehicles

The electric vehicle (EV) industry has made significant strides in practice, yet persistent technology bottlenecks impede its continuous progress. Collaborative innovation has emerged as a promising strategy to tackle these bottlenecks. To explore collaborative innovation within the EV sector, this study constructed EV collaborative innovation networks using patent data from 2009 to 2023 and applied the quadratic assignment procedure (QAP) to explore the internal mechanism of EV collaborative innovation networks. Furthermore, fuzzy-set qualitative comparative analysis (fsQCA) was employed to investigate the configurations for the realization of breakthrough innovation. The results show that (1) state-owned enterprises, along with universities and research institutions are crucial within the EV collaborative innovation network. Among them, state-owned enterprises play the most critical role. (2) Geographical proximity and institutional proximity positively impact the formation of EV collaborative innovation networks, while the effects of organizational proximity are insignificant. (3) Two pathways are identified for the realization of breakthrough innovation of innovation actors, with all proximity variables acting as core conditions in these pathways. This research engages in a dialogue between collaborative innovation networks and breakthrough innovation and enriches relevant theories and literature on this topic. Besides, this study provides practical contributions for innovation actors to select collaborative partners and take tailored pathways for the realization of breakthrough innovations in the EV industry.

Evolution of regional collaborative innovation network by the ‘two-wheel drive' of external proximity and endogenous gravity

ABSTRACT Collaborative innovation is the key support for promoting high-quality regional development. Taking Guangdong, Fujian and Zhejiang coastal city clusters as an example, this paper analyzes the evolution mechanism of collaborative innovation network based on the ‘two-wheel drive' perspective of external proximity and endogenous gravity. The results show that the difference of resource control ability among nodes in the network is decreasing, and the inverted ‘V’ structure with Xiamen and Putian as the main apex has evolved into a more robust ‘dual core’ (Fuzhou-Xiamen) radiation-type spatial structure. In addition, the evolution of regional collaborative innovation network is driven by ‘two wheels’. In external proximity, institutional proximity plays the strongest role in promoting, followed by geographical proximity, and the promoting role of technological proximity is gradually weakened. In the endogenous gravity, the influence of investment in science and education is strengthening, while the influence of the administrative level is declining.

The impact of institutional proximity on digital technology innovation linkages: empirical evidence on the Guangdong-Hong Kong-Macao greater bay area of China

ABSTRACT Promoting digital technology innovation connections is crucial to establishing an international science, technology, and innovation hub in the Guangdong-Hong Kong-Macao Greater Bay Area, and institutional disparities influence the clustering and flow of digital technology as an innovation factor. Promoting digital technology links and cooperation across cities is a practical strategy to improve the region's innovation efficiency and capacity. However, detailed research on the flow of innovation determinants such as digital technology and there is no evidence of the influence of institutional proximity on digital technology innovation connections. Based on the patent transfer data of the National Key Industry Patent Information Service Platform from 2010 to 2021, this paper constructs a new institutional proximity indicator applicable to the Guangdong-Hong Kong-Macao Greater Bay Area and other cross-system regions, applies a spatial econometric model to investigate direct and spatial spillover effects of institutional proximity on the digital technological innovation linkages. It is proved that institutional proximity has significant positive direct and spatial spillover effects on digital technological innovation linkages. The study has significant theoretical and practical implications for increasing the association and collaboration of digital technology and other innovation elements across institutional boundaries.

Sustainable food chains designed for optimised resource use: Optimising downscaled food chains for sustainable resource use: A comprehensive case study on tomato juice

As consumers increasingly prefer locally sourced food, there is a growing movement towards optimising resource use and reducing emissions in supply chains. While Short Food Supply Chains (SFSCs) traditionally emphasise social and institutional proximity, this study strategically addresses the environmental impact by implementing innovative technologies on a smaller scale. This article explores the possibility of implementing a mobile processing unit (FOX unit) that utilises two innovative technologies, one for gentle juice extraction (spiral filter) and the other for preservation of freshly pressed products (pulsed electric fields - PEF). The study investigates a solution that could streamline the supply chain between producers and consumers by offering a decentralised and modular approach to processing. Using Life Cycle Assessment (LCA), tomato juice production is compared under traditional thermal pasteurisation (Scenario 1) and the FOX unit (Scenario 2). This study also assesses the impacts of centralising production and shipping raw materials between countries (Scenario 3), considering the FOX unit as part of the evaluation. Further analysis includes relocating this unit to the countries of raw material origin (Scenario 4). Data retrieved from literature, databases, and practical trials, revealed that tomato juice production with the FOX unit led to a 15% reduction in environmental impact across all categories compared to traditional thermal pasteurisation. When relocating the unit, the overall environmental impact decreased as the volume of processed raw materials increased, reaching levels comparable to the results obtained from shipping 1 ton of raw material to a centralised location in various studied countries (with variations in midpoint categories depending on the location, such as 200 tons in France, 15 tons in Italy, and 45 tons in Spain), albeit with variation in the categories. This study highlights the potential environmental benefits of integrating the FOX unit in SFSCs, offering valuable insights for sustainable food supply chain practices.

Sustainable innovations, knowledge and the role of proximity: A systematic literature review

AbstractInnovations can substantially contribute to the transformation toward sustainability if they induce a positive social and/or environmental impact. Such sustainable innovations differ considerably from conventional, purely economic innovations. The main difference stems from the different knowledge bases necessary for the development of these innovations. These knowledge bases are widely dispersed across different actors from business, academia, government, and civil society. Following the innovation system approach, we look at actor constellations, linkages between actors, and knowledge flows within networks that generate sustainable innovations. For this purpose, we conduct a systematic literature review, focusing on the concept of proximity and its five dimensions (geographical, cognitive, institutional, organizational, and social proximity). The results show that all proximity dimensions, as well as the interdependencies between them, are relevant for analyzing knowledge flows leading to sustainable innovations. The interplay of the different proximity dimensions can be described via two mechanisms, one being reinforcement and the other one being either substitution or overlap. We conclude that for the occurrence of radical, systemic innovations, which have the potential of altering the prevailing socio‐economic paradigm toward greater sustainability, a combination of low cognitive and low (micro‐) institutional proximity combined with high organizational, social, or geographical proximity, appears particularly conducive.

Spatial Characteristics and Influencing Factors of Intercity Innovative Competition Relations in China

In the knowledge economy era, innovation has become a key emphasis for urban competitions. This paper constructs a theoretical research framework that integrates the basic understandings, influencing factors and ensuing results of intercity innovative competition relations. On the basis of data from the general programs of the National Natural Science Foundation of China from 2005 to 2019, this paper constructs intercity innovative competition relations in China, analyses their spatial distribution and quantitative characteristics, and quantitatively investigates the impact of urban innovation capacity and multidimensional proximity (e.g., geographical proximity, institutional proximity and cognitive proximity) on intercity innovative competition relations through a negative binomial model. The study obtained the following findings: (1) In terms of the overall intercity innovative competition relations, the intensity of China’s intercity innovative competition relations gradually increased from 2005 to 2019, with a spatial clustering towards cities with high administrative ranks (e.g., municipalities directly under the central government, sub-provincial cities and provincial capitals); Beijing is always at the centre of innovative competition relations, but its standing has slightly slipped in recent years. (2) From the perspective of disciplines, cities can become benchmarks in particular fields of innovative competitions by competing according to their disciplinary strengths; intercity innovative competition relations in China vary across various academic disciplines. (3) In terms of influencing factors, urban innovation capacity has significant positive effects on intercity innovative competition relations; geographical proximity, institutional proximity and cognitive proximity all have significant positive effects on innovative competition relations; and interactions occur between multidimensional proximities, including a complementary effect between geographical proximity and institutional proximity, a substitutive effect between cognitive proximity and geographical proximity, and a substitutive effect between cognitive proximity and institutional proximity.

What factors contribute to the formation of interorganizational collaboration networks: A longitudinal study in response to COVID‐19 emergency

AbstractIn the realm of addressing large‐scale emergencies, interorganizational collaboration emerges as a crucial strategy for effectively mitigating crises. However, the existence of institutional and procedural disparities poses significant challenges in establishing collaborative networks among diverse organizations. Moreover, the determinants influencing cooperative formations exhibit heterogeneity across distinct network structures. This research employs proximity theory and the Exponential Random Graph Model (ERGM) to comprehensively examine the dynamic evolution of interorganizational collaboration networks. Our primary objective is to investigate the effects of institutional proximity, organizational proximity, geographical proximity and social proximity on the formation of interorganizational collaboration networks. Textual data was meticulously collected from the Wisers database and official websites. The findings underscore the pivotal roles of institutional and organizational proximity in fostering interorganizational collaboration networks, while the impact of geographical proximity is relatively insignificant. Additionally, we delve into the driving factors that influence the formation of diverse structural networks. Social proximity emerges as a significant catalyst for horizontal collaborative networks but impedes the establishment of vertical collaborative relationships. Furthermore, we partition the entire emergency response process into six stages to explore the dynamic evolution characteristics of these networks. The results reveal an overall decentralized structure with a tendency toward clustering in the collaborative network. These findings hold substantial significance as they elucidate the influential factors driving the formation of diverse collaborative networks in a dynamic context. Therefore, this research bears implications for policymakers and practitioners aiming to enhance their emergency response capabilities with optimal efficiency.

Geographical proximity and technological similarity

From a time-space perspective, we assess the effects of geographical proximity on technological convergence over time identifying proximity dimensions associated with countries’ technological similarities. We compare a time series of input-output coefficients for 66 different countries extracted from the 2021 edition of OECD Inter-Country Input-Output to verify whether nearby countries are more likely to share similar technologies. Our results reveal that geographical technological spillovers are important since closer economies tend to be more similar than distant ones. This is particularly evident for the European economies in the sample, suggesting that institutional proximity also matters for technological convergence. Over time, closer economies are becoming structurally more similar; however, this trend seems to have slowed down after the 2008–9 financial crisis. Conjectures on how informational gaps are filled in the consolidation of the databases – encountered in an environment of limited information – based on known practices of using regional and global average structures may add a layer of uncertainty to our results.

Spatial spillovers in trade agreement memberships: Does institutional proximity matter?

AbstractThis paper examines spatial spillovers in the formation of preferential trade agreements (PTAs) through a new channel of institutional proximity. Our dependent variable is the status of PTAs between country attributes within a country‐pair. The explanatory variable of interest is the status of PTAs in neighbouring country‐pairs that share proximity in institutional development. We consider democracy and economic freedom as the main aspects of institutions, and use both as the fundamental components of institutional distance between country‐pairs. Employing a spatial econometric method, we find strong evidence of the institutional interdependence of PTAs: country‐pairs tend to influence each other's decision on the formation and the chosen type of PTAs (i.e., deep or shallow), such a neighbourhood effect increases with institutional proximity and is more prominent for the decisions on the type of PTAs. The institutional spatial channel is robust to various robustness checks.

Assessing the relevance of different proximity dimensions for knowledge exchange and (co-)creation in sustainability-oriented innovation networks

Innovations incorporating environmental and social considerations can address many sustainability challenges. Such sustainable innovations emerge in networks often comprising actors from business, academia, civil society, and government. The crucial interactions here are the (co-)creation and transfer of knowledge, mutual learning, and experimentation in different environments. To better understand these knowledge processes and hence the eventual outcome of sustainable innovations, we analyze the actors’ relationships with the help of proximity and its five dimensions, namely geographical, cognitive, institutional, organizational, and social proximity. Building upon findings from sustainability science and innovation system theory, we present a refined proximity framework, introducing a differentiation of institutional proximity into micro- and macro-institutional proximity and a differentiation of cognitive proximity into systems-cognitive, normative-cognitive, and transformative-cognitive proximity. Analyzing examples from the literature by applying this framework, we see that all proximity dimensions and their interdependencies help to better understand knowledge processes and innovations in sustainability-oriented innovation networks. We find that such networks often depict low levels of micro-institutional and systems-cognitive proximity, which coheres with the prevalence of inter- and transdisciplinary approaches and the wide inclusion of relevant stakeholders for addressing sustainability issues. Our framework further reveals that successful networks show high levels in other proximity dimensions, with normative-cognitive proximity appearing to play a crucial role, highlighting the importance of shared goal orientations. Our results provide valuable input for the formation of sustainability-oriented innovation networks by pointing out the necessary combination of distances that allow for creativity and learning, combined with appropriate proximities for exchange and mutual understanding.

What Drives Interlocal Cooperation in Economic Development? A Qualitative Comparative Analysis of Interlocal Industrial Parks in China’s Yangtze River Delta

Recent studies suggest that influence of contextual conditions and cooperative arrangements on interlocal cooperation should be best understood as part of configurations. This study enriches this nascent perspective by developing a configurational theoretical framework and explores how contextual conditions (institutional proximity, geographic proximity, organizational proximity) and cooperative arrangements (goal interdependence, resource complementarity, collaborative structure) combine to influence interlocal cooperation in economic development. A fuzzy-set qualitative comparative analysis is used to analyze 34 interlocal industrial parks (IIPs) in the Yangtze River Delta of China. The results show two first-order equifinal configurations and six second-order configurations that lead to the success of IIP. The findings underscore that success conditions of interlocal cooperation in economic development work in configurations, not in isolation, and contribute meaningfully to debates pertaining to specific conditions.

Influence of proximities and their interaction effects on scientific collaborations: the case of Turkish regions

Proximity dynamics behind co-production of scientific knowledge have been explored for a decade while their combined effects form a recent interest area. The study seeks to discover these effects in the unexplored case of Turkish NUTS 3 regions. Cognitive, relational and institutional proximities and their interaction effects are evaluated towards this goal with a rapid expansion from 2006 onwards representing the institutional dynamics. The intensity of coauthorships is evaluated in six aggregate fields of FORD classification of OECD and measured based on travel time distance, publication sizes, similarity in knowledge bases, tie similarities of provinces and new universities’ academic presence born from a rapid expansion process after 2006. The results display positive role of geographical, cognitive, relational proximities. In interaction, provinces proximate in one of the latter two see an increase in coauthorships when they are also geographically close in most fields. However, cognitive and relational proximity together reduce coauthorship chances. On the other hand, new universities’ academic presence does not increase coauthorship chances, however, it does so when they are located in spatially closer regions in the extent of two fields.

Social innovation networks and territorial dynamics

Social innovation networks are increasingly recognized as key players in social innovation. Based on qualitative case-studies, this research analyses, through the dimensions of proximity, the Actor-Network Theory and collaborative innovation - the process by which networks develop social innovations with a public service aim and create territorial dynamics. The findings reveal two types of implementation strategies, which create social and institutional proximity. Innovation processes, although not exempt from controversies, provide a broad latitude for local actors to negotiate, to adapt and share common tools or to create ad hoc methods. Organizational and cognitive proximity ensure collaborative governance and creativity. Territorial innovation dynamics rely on existing resources but the creation of new interactions also shapes the territorial service offering.

Does Technological Intensity Matter for Global Cross‐Border Mergers and Acquisitions in Manufacturing, 1998–2018?

AbstractDespite being a key feature of the globalising world since the 1980s, the patterns and relationships between acquirer and target firms in cross‐border mergers and acquisitions (M&As) have only gained attention in recent years. By examining the data between 1998 and 2018 through multinomial logistic regression models, this paper investigates the goodness of match on technological intensity (the closeness of technological capabilities) between acquirer and target firms and the effects of geographical, cultural and institutional proximity in global cross‐border M&As in manufacturing sectors. Our results suggest that firms are more likely to acquire overseas counterparts with similar levels of technological intensity in manufacturing. Moreover, geographical proximity is significant in the M&As of target firms in low‐tech and medium‐low‐tech sectors, while cultural and institutional proximity matter for cross‐border M&As among medium‐high‐tech and high‐tech firms. High‐tech acquirer firms in advanced economies tend to acquire their high‐tech counterparts located in larger economies, while technological intensity is more important for high‐tech acquirer firms based in non‐advanced economies, as the closeness of technological knowledge with potential target firms allows them to generate potential synergies and overcome cultural gaps and foreignness in distant host countries.

Proximity and cross-border acquisitions of technology assets by firms in latecomer economies: a study of Chinese firms, 2001-2018

ABSTRACT We propose an analytical framework to examine how various dimensions of proximity between home and host countries could account for the trajectories and specificities of cross-border acquisitions of technology assets (CATAs) conducted by acquirer firms in latecomer economies. As Chinese firms have been increasingly using CATAs as a mean to catch up with their counterparts in advanced economies, we referred to their acquisition records to illustrate the applicability of the proposed framework. Based on a compiled dataset of the number of CATA transactions from 2001 to 2018, this paper examines the effects of various dimensions of proximity on the spatio-temporal patterns of Chinese CATAs using negative binomial regression models. Our findings demonstrate that the difference in governance between China and host countries (institutional proximity), the size of overseas Chinese population in host countries (social proximity), and the value of import from host countries (economic proximity) have significant effects on the propensity of Chinese firms to engage in CATAs. Physical distance and cultural gap between China and host countries, however, have no significant impact on CATAs. Further examination of the results reveals that Chinese firms tend to acquire target firms outright in culturally distant host countries to reduce the risk of their overseas acquisition in CATAs. In addition, we also found that there is a dynamic relationship between different dimensions of proximity and CATAs: from the relative importance of economic proximity between 2001 and 2012 to the rising influence of social and institutional proximity between 2013 and 2018 on CATAs.

Effects of proximity dimensions on inter-firm cooperation among MSMEs in some selected leather industrial clusters in Nigeria

This study was carried out to investigate the effects of proximity on inter-firm cooperation in some selected leather industrial clusters in Abia, Lagos and Kano states in Nigeria. MSMEs in these states' leather manufacturing clusters were specifically chosen for the study using a two-stage sampling approach. In the cities of Lagos, Aba, and Kano, 412 MSMEs' owners and managers were chosen using the snowballing sampling technique approach. The study's sample size was this. These owners and managers completed a questionnaire to provide information on the MSMEs. Descriptive statistics and inferential statistics were used to analyse the data collected. The regression results showed that all the proximity dimension variables had significant and positive relationships with marketing cooperation. Also, institutional proximity (INP) and organisational proximity (ORG) had significant and positive relationships with R&D cooperation and only social proximity (SOP) had a positive and significant relationship with innovation cooperation. However, the X2 test of significance showed that the pooled proximity dimensions and cooperation variables had the following significant and positive relationships with the cooperation variables: marketing cooperation [X2 (16,412) = 332.412, p = .000], R & D cooperation [X2 (8, 412) = 26.909, p = .001] and innovation cooperation [X2 (12, 412) = 41.342, p =.000]. Owing to these relationships, 9 gains out of 13 potential gains accrued to the MSMEs which may aid in the industrial growth and development of the country. These gains are: rapid innovation, new business formation, business growth, access to new markets and greater efficiency. The study concluded that due to their proximal locations, MSMEs in the selected Nigerian leather industrial clusters cooperated with one another and due to this, were able to appropriate some industrial growth and development-promoting gains to themselves. However, there were some other potential gains such as mutual learning, mutual stimulation of innovativeness, cost reduction and group purchasing that were not appropriated. The study therefore recommends that Nigerian governments, at all tiers, should formulate policies that encourage cluster formation and cooperation among the proximally located MSMEs to enable them appropriate all the potential gains derivable from cooperation.

The role of spatial and relative proximity while transforming towards an edible city – The case of the City of the Future Dresden (Germany)

Transition Experiments (TE) are seen as a key to trigger sustainability transitions. However, the role of space in processes of experimentation for new and future-oriented solutions has thus far remained under-explored. In this paper, we shed light on the spatial patterns between actors engaging in a more sustainable future by establishing publicly accessible areas with edible greenery. We empirically investigate the emergence and evolution of an edible city TE using the heuristic of spatial and relational proximity in three different process phases: initiation, innovation, and acceleration. Based on expert interviews and document analysis, the results show that a lack of institutional proximity between actors is a major obstacle for the TE. In contrast, spatial and social proximities can bridge these distances. Overall, it can be said that the consideration of spatial and relative dimensions can provide a valuable contribution to an ever-growing debate on the geography of transition processes.