Network Relations and Local Economic Development: Some Causes of Differentiated Network Structures and Intensities among Turkish Industrial Firms

Abstract

The regional-growth literature emphasises the importance of positive network externalities as determinants of the long-run competitiveness of region, highlighting their role in reducing spatial transaction costs and facilitating collective learning and innovation. In this paper we contribute to this literature by presenting new evidence from a firm-based survey within three Turkish industrial centres about the causes of differentiated network activity. Using multivariate analysis, we show that locational rather than sectoral differences explain local-linkage intensities, but this is not the case for global links. Second, there is an important relationship between firm size and local-linkage and global-linkage densities; the density of local networks decreases with increasing firm size, whereas the density of global networks increases with firm size. Third, there is a positive relation between globalnetwork density and firm productivity. We argue that the comparative and quantitative analysis we employ is a useful adjunct to case-study analysis, which could help avoid misconceptions and lead to a more realistic theory.