The persistent role of proximity in vertical relations: Evidence from the European car industry

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Publication Type:

Conference Paper

Source:

Gerpisa colloquium 2012, Krakow (2012)

Keywords:

Automotive industry, buyer-supplier relations, clustering, cultural proximity, geographical proximity, outsourcing

Abstract:

It is sometimes argued that in a global economy many of the traditional
roles of proximity have become less important. Yet there is persistent evidence
that proximity still shapes economic activity. This paper investigates the role
of proximity in the choice of external suppliers in the European automotive
industry. We conceptually break it down into three complementary dimensions:
physical proximity, cultural proximity, and proximity to clusters. Using
a supplier choice model, we find that each of the three dimensions has strong independent
explanatory power for the formation of buyer-supplier relationships
and that cultural proximity has the strongest e ffects. The eff ect of geographical
proximity has become stronger over time at very short distances, but weaker at
longer distances. The positive e ffect of clusters is limited to vertical clusters of
suppliers that do not produce direct substitutes.

Copyright© Gerpisa
Concéption Tommaso Pardi
Administration Stéphane Heim

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