Inter-firm co-operation as a regional development potential?

Abstract

In this article the question is examined whether inter-firm cooperation is a potential for the realisation of an endogenous development strategy even under the conditions of increased competition caused by globalisation of economic activities. If cooperation is an endogenous potential in such a regional development strategy the following criteria should be fulfilled: * high tendency to cooperate, a broad base of intraregional cooperation, * no one-sided dependencies between the cooperation partners, * strategic cooperation functions are performed by indigenous partners, * cooperation of indigenous enterprises shows a positive correlation with a firm's success. These criteria were examined in an empirical study focusing on cooperation behaviour in the machinery industry in Lower and Middle Franconia (Northern Bavaria). According to the dominance of small firms in the research area, the exposition focused on the cooperation of small firms with their clients. The following results became apparent: 1) Firms in the research area have a high tendency to cooperate, large firms are more likely to cooperate than small firms. Intraregional cooperation is made up more of small than of large firms. 2) Regarding size relationships between the partners cooperation between small suppliers and their large clients predominate. Especially for small firms cooperation is linked to strong economic, to a smaller extent even to production-based dependencies. 3) The correlation between cooperation and firm success is ambiguous. As a tendency it becomes apparent that small firms cooperating only with large firms have a less favorable development of turnover and are less innovative than small firms cooperating only with small customers. Firms being strongly dependent on their cooperation partners show a tendency to implement innovations to a smaller degree, but have a more favourable development of turnover. 4) As a strategically important type of cooperation collaboration in development was examined. Though cooperation exists to a great extent between small and large firms, a higher share of firms cannot be noted with a positive development compared to the firms cooperating in other fields. 5) The comparison of intraregional and national/international cooperation showed that the first is characterized to a larger extent by economic dependencies and less strategic significance. According to these results one cannot suppose a general suitability of cooperation as a regional development potential. Specific types of inter-firm collaboration however can go along with positive regional economic effects. Whether they make up a solid base for a cooperative regional development strategy has to be the subject of further research.