Carla Costa’s Paper Receives an Honorable Mention for Best Paper at the 2011 SMS Conference

 Carla Costa and Rui Baptista 

Carla Costa, a dual degree doctoral student in Technological Change and Entrepreneurship at the Instituto Superior Técnico of the Universidade Técnica de Lisboa (IST/UTL) and Carnegie Mellon University, and her advisor Rui Baptista, from the IST/UTL, received an honorable mention for a paper titled “Agglomeration vs. Organizational Reproduction: The Molds Cluster in Portugal" at the 2011 SMS - Strategic Management Society Annual Conference, on November 6 to 9, 2011.

According to Carla Costa, “the honorable mention puts our paper in the group of the five best papers presented at the 2011 SMS.” “The conference included over 500 papers in the competitive sessions presented over four days; it was attended by about 1,000 scholars from 44 different countries (mainly from North America and Europe). The “SMS publishes two very important A level journals in our field, we are very honored by this award.”

from left to right: Rodolphe Durand, Best Paper Award selection committee (HEC-Paris), Rui Baptista, from IST/UTL, Carla Costa, Ph.D. student at IST/UTL and CMU, and Jay Barney, president of SMS (Ohio State University).

The paper uses the Quadros de Pessoal (QP) micro-data, a Portuguese longitudinal matched employer--‐employee data set including extensive information on the mobility of workers and business owners for the period 1986--‐2008, to examine the mechanisms that have been driving regional clustering of the Portuguese plastic injection molds industry. The main goal of the paper is “to clarify what drives industry agglomeration, or what motivates companies to locate close to their competitors.” According to the data, the authors analyzed the molds industry in Portugal and concluded it is very strongly agglomerated in two regions (Marinha Grande and Oliveira de Azeméis), outside the main metropolitan centers of Lisbon and Porto. In the paper, the authors quoted Steven Klepper, from Carnegie Mellon University, “Agglomeration occurred historically since the first few firms in the industry chose to locate in that region, in a process similar to that experienced by the US automotive industry in Detroit and the semiconductor industry in Silicon Valley (Klepper 2010).”

Carla Costa explained that “we theorize that, while organizational reproduction through spinoffs dominates a cluster's early stages of growth, agglomeration economies may possibly emerge in the cluster's mature phase, due to the shape of the industry's structure and firm boundaries: in a cluster populated by small, vertically disintegrated firms that are able to access external capabilities through an informal network, agglomeration economies are likely to emerge as a positive force”. The empirical approach of the authors was twofold: “first, we provide a case study of the early evolution (1946-1986) and current organization of the industry; second, we use detailed data on firms and founders for the period 1987-2009 (when entry remained pervasive) to test the predictions of each of the two theories.” The authors found that, while organizational reproduction has played a major role in the clustering of the industry, agglomeration economies recently have gained influence.

Questioned about the real impact of this paper, Carla Costa answered that “our findings have implications both for policy makers and for companies, because our conclusions confirm that policy measures designed to create clusters by promoting industry collocation (in science parks for example) may not achieve the success intended because the spinoff process is not the driver of early collocation.” However, the authors also showed that “when the industry is composed of a network of small companies that rely heavily on subcontracting collaborations, in mature stages of the cluster the companies may benefit to choose to locate in the agglomerated region.” Therefore, the authors propose that different agglomeration mechanisms play important roles at different stages of the cluster's life cycle, depending also on the industry's level of vertical integration.

For the authors this achievement was a “very important feedback for our paper that we hope to publish soon.”

November 2011

 

Title: "Agglomeration vs. Organizational Reproduction: The Molds Cluster in Portugal"
Authors: Carla Costa - PhD Candidate in Technological Change and Entrepreneurship (Social and Decision Sciences, Carnegie Mellon University and Instituto Superior Técnico of the Universidade Técnica de Lisboa (IST/UTL) and Rui Baptista - Department of Engineering and Management, Instituto Superior Técnico of the Universidade Técnica de Lisboa
Abstract: This paper examines the mechanisms that have been driving regional clustering of the Portuguese plastic injection molds industry. Two alternative theories are explored: agglomeration economies/externalities and organizational reproduction/heritage. We theorize that, while organizational reproduction through spinoffs dominates a cluster's early stages of growth, agglomeration economies may possibly emerge in the cluster's mature phase, due to the shape of the industry's structure and firm boundaries: in a cluster populated by small, vertically disintegrated firms that are able to access external capabilities through an informal network, agglomeration economies are likely to emerge as a positive force. Our empirical approach is twofold: first, we provide a case study of the early evolution (1946-1986) and current organization of the industry; second, we use detailed data on firms and founders for the period 1987-2009 (when entry remained pervasive) to test the predictions of each of the two theories. We find that, while organizational reproduction has played a major role in the clustering of the industry, agglomeration economies recently have gained influence.