Who are those new entrants? Dissecting types of foreign capital entrance in traditional industrial districts

ABSTRACT

This paper explains the effects originated by the massive entrance of foreign capital in the ceramic tile district of Castellon (Spain). Cross-fertilizing multinational acquisitions and industrial districts’ literature, and using mix-methods on a focal case study, our article explores the effects that those multinationals have on districts, and whether the type of multinationals (financially-oriented vs industrial) presents different impacts on a focal industrial district. Our results point out that the massive entrance of foreign capital alters the local system. Overall, positive perceived attitudes are evidenced, along with negative attitudes associated with potential risks of lack of local-embedded ownership and the reduction of local cooperative ties.

KEYWORDS:

• Industrial districts
• innovation
• private equity
• multinationals
• acquisitions

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 VICTORIA top executive as informant.

2 M millions; https://manufacturing-today.com/profiles/victoria-plc/ (accessed 31 January 2023).

3 https://www.victoriaplc.com/wp-content/uploads/2018/03/half-year-report-2015.pdf (accessed 31 January 2023).

4 https://markets.ft.com/data/announce/full?dockey=1323-13406262-1I0NG5RSD0TSKJPPUUSF6CDJA1 (accessed 5 January 2023).

5 See Appendix.

6 https://www.lonestarfunds.com/ (accessed 5 May 2023).

7 https://www.privateequityinternational.com/pei-300/#pei-300-full-ranking (accessed 5 January 2023).

8 https://castellonplaza.com/victoria-confirma-el-cierre-de-la-planta-de-saloni-en-sant-joan-de-moro-y-concreta-en-198-los-despidos (accessed 5 May 2023). https://castellonplaza.com/victoria-plc-impulsa-la-azulejera-turca-graniser-ante-los-altos-costes-del-gas-en-europa (accessed 5 May 2023).

9 www.ascer.es; ASCER reports.

10 In Hervas-Oliver et al. (2022a), it is stated that:

• - “Investment funds based on financial resources, without a manufacturing tradition are not good … ..they just treat firms as financial numbers and make decisions based on that, without a long-term strategy … .”;

• - “I do not think that financial investment funds are good for the cluster …  … they have removed competitors and created larger champions that concentrate most of R&D … ..and the decision center is no longer the cluster.”

11 See Appendix.

Additional information

Funding

This work was supported by Ministerio de Ciencia e Innovación (España) (AEI/Feder); PID2021-128878NB-100 MICIN/AEI/10.13039/501100011033.