Place-based innovation in industrial districts: the long-term evolution of the iMID effect in Spain (1991–2014)

The innovation-Marshallian industrial district (iMID) effect defines the existence of dynamic efficiency in the Marshallian industrial district (MID) in the form of a positive innovative differential compared to the average of the national economy. Cross-sectional analyses have proven the existence of the iMID effect. Nevertheless, these findings do not provide any evidence on the evolution in the iMID effect over a long period and, in particular, when phases of growth, crisis and economic recovery follow one another, as occurred in the world economy around 1990 and 2007. This paper aims at closing this gap in knowledge by measuring the evolution of the iMID effect for Spain for the period 1991-2014. The measurement is made using an exhaustive database of 143,229 patents and by estimating a knowledge production function for the local production systems (LPSs). The results show that MIDs registered the largest number of patents compared to the other LPSs during the time span considered, that the iMID effect is higher for the highest quantiles of innovative intensity, and that MIDs' innovative intensity has been continuously above the national average, even after the 2007 economic crisis. MIDs are still fundamental for the generation of innovation in the Spanish economy.