From toys to automobiles: foreign investment, firm heterogeneity and intermediaries in a Portuguese industry

ABSTRACT

In the literature on territorial innovation systems there is a constant tension between the effect of endogenous and exogenous factors and their relative importance. In order to address this tension several approaches have sought to conceptualize the relational and multi-scalar dimension of innovation and to explain how external knowledge and economic flows in conjunction with regional contexts combine to produce regional growth, stagnation or decline. This paper will contribute to this debate, while also highlighting that even at the local level there is substantial heterogeneity between firms. It will also shed light on the role of intermediary organizations that can help address information and power asymmetries between multinational corporations and less competitive local firms. Empirically it will draw on the case study of the Portuguese moulds industry, which has successfully adapted to shifts in the global economy by drawing on local resources while also remaining integrated into global value chains.

KEYWORDS:

• Territorial innovation models
• foreign investment
• global value chains
• multi-scalar
• intermediaries

Acknowledgements

I would like to thank Andy Pike and Andy Gillespie for their supervision and guidance while writing my PhD dissertation, and Robert Hassink for comments on an earlier version of this paper. I would also like to thank Emmanouil Tranos for designing the map in Figure 1.

Disclosure statement

No potential conflict of interest was reported by the author.

Additional information

Funding

Research for this article was supported by the fellowship SFRH/BD/27431/2006 from the Fundação para a Ciência e a Tecnologia (Portugal). This fellowship programme is funded by the Programa Operacional Potencial Humano and the European Social Fund.