Structure and Governance in Industrial Districts: Implications for Competitive Advantage

Abstract

The existing research on industrial districts is fragmented, and yields conflicting advice for managers about the benefits and costs of locating in an industrial district. We resolve much of this ambiguity by synthesizing and integrating the existing research, and developing a typology of districts based on the continuous dimensions ofneed for coordinationandcentralization of control. In so doing, we elucidate why different types of industrial districts have different structures, and different competitive implications. We introduce four archetypes of industrial districts (based on extreme values of our two dimensions), and for each we discuss the benefits and costs of locating in the district, the sources of competitive advantage for members of the district vis-à-vis non-members, and the sources of competitive advantage a district firm may gain over other members of the same district.