Comparing the effects of mutualism and competition on industrial districts

Industrial districts are made up of numerous firms or industries interacting in myriad ways. We create and study a model of trade and service interactions in an industrial district, and then extend it to investigate the effect of both positive (mutualistic) and negative (competitive) non-trade inter...

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Bibliographic Details
Published in:Physica A 2014-12, Vol.416, p.541-557
Main Authors: Knight, Christopher J.K., Penn, Alexandra S., Hoyle, Rebecca B.
Format: Article
Language:English
Subjects:
Competition
Industrial district
Mutualism
Statistical mechanics
Suppliers
Trade dynamics
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Summary:Industrial districts are made up of numerous firms or industries interacting in myriad ways. We create and study a model of trade and service interactions in an industrial district, and then extend it to investigate the effect of both positive (mutualistic) and negative (competitive) non-trade interactions on the behaviour of two different types of industrial district—Marshallian and hub-and-spoke. In particular we study whether the structure of the district, or the positioning of the relationships, makes a difference to the outcome for the district as a whole. We find that both these aspects make a difference. For instance, in both Marshallian and hub-and-spoke districts a competitive relationship between firms that are directly linked by trade has a stronger effect than competition between firms that are not. On the other hand in a Marshallian district it is possible to make the district more ‘egalitarian’ by adding a mutualistic relationship between suppliers or between intermediary firms, but this effect is not seen in hub-and-spoke districts. We highlight for further investigation a hypothesis suggested by our results that the effects of mutualism on an industrial district are more pronounced than those of competition. •We introduce a Lotka–Volterra model for the size of firms in an industrial ecosystem.•We consider two types of industrial district: Marshallian and hub-and-spoke.•We model the effect of mutualism and competition between firms.•Mutualistic relationships can make a Marshallian district more egalitarian.•Mutualistic relationships may have a stronger effect than competitive ones.
ISSN:0378-4371
1873-2119
DOI:10.1016/j.physa.2014.09.001