Chinese manufacturing entrepreneurship capital: evidence from Italian industrial districts

ABSTRACT

The purpose of this paper is to obtain a better understanding of the presence of Chinese manufacturing entrepreneurship in industrial districts compared to other Italian local economies. Statistical data are used to uncover where Chinese manufacturing entrepreneurs localize their businesses and to what extent this localization is an innovation within the geographical pattern of industrial districts. Data on Chinese manufacturing micro-enterprises (i.e. with less than 10 persons employed) started up in years 2005–2007 and 2008–2010 are cross-tabulated by industrial districts and other local economies to investigate their change over time. The empirical findings show a dominance of industrial districts: those located in Tuscany are on top and Prato district ranks first.

KEYWORDS:

• Entrepreneurship capital
• industrial districts
• micro-enterprises
• Chinese entrepreneurship
• Prato
• Italy

Acknowledgements

The authors are grateful to anonymous reviewers for their valuable comments that improved the manuscript. The usual disclaimers apply.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. Putnam writes (2000, p. 19),

Social capital refers to connections among individuals – social networks and the norms of reciprocity and trustworthiness that arise from them. In that sense social capital is closely related to what some have called ‘civic virtue'. [ … ] Social capital calls attention to the fact that civic virtue is most powerful when embedded in a sense network of reciprocal social relations. [ … ] Social capital refers to features of social organization, such as networks, norms, and trust, that facilitate coordination and cooperation for mutual benefits.

2. Gartner and Carter (2003) write,

Entrepreneurial behavior involves the activities of individuals who are associated with creating new organizations rather than the activities of individuals who are involved with maintaining or changing the operations of on-going established organizations.

3. The results of the study by Audretsch and Keilbach (2002) on the German regions (or Kreise) indicate that ‘those regions with a greater degree of entrepreneurship capital exhibit systematically higher levels of labor productivity than do those regions with lower endowments of entrepreneurship capital’ (p. 10).

4. The category of ‘individual entrepreneur’ includes sole traders, self-employed and freelance professionals (ISTAT, 2005b).

According to the definition, an enterprise is ‘any entity engaged in an economic activity, irrespective of its legal form'. The wording reflects the terminology used by the European Court of Justice in its judgments. It is the economic activity that is the determining factor, not the legal form. In practice, this means that the self-employed, family firms, partnerships and associations or any other entity that is regularly engaged in an economic activity may be considered as enterprises. (European Commission, 2015, p. 9)

5. Denison, Dharmalingam, Johanson, and Smyth (2009, p. 4) provide interesting evidence of the economic crisis of Prato:

The textile industry [in Prato] underwent an economic crisis in the 1980s, with the loss of 3550 small businesses and 15,000 jobs, following which it repositioned itself, focusing on the supply of textiles for clothing, and innovating in both materials and production methods.

6. The original passage is as follows:

If the local spirit of any place ran high: if those born in it would much rather stay there than migrate to another place: if most of the capital employed in the industries of the place were accumulated from those industries, and nearly all the income enjoyed in it were derived from its own resources: – if all these conditions were satisfied, then the people of such a place would be a nation within a nation in a degree sufficient to render propositions, which relate to international trade, applicable to their case from an abstract point of view. (Marshall, 1932, pp. 13–14)