Project

Geography of institutional change: A comparative analysis of family firm succession in Baden-Württemberg and the Basque Country

Goal: Social institutions have increasingly become recognized as important factors of economic development. However, institutions vary across regions, and allegedly ‘good institutions’ are hard to imitate or transmit to other locations. For this reason, both institutional research and economic geography face the challenge of understanding the generation and transformation of social institutions.

This inherent processuality can best be studied in situations of change, which is why this research project focuses on enterprise succession in family firms. The situation of enterprise succession, increasingly posing a challenge to the long-term continuity of regionally embedded family businesses all over Europe, serves as both the unit of analysis and the trigger of institutional change in inter-firm interactions. Consequently, this project pursues two objectives:

Explaining different forms and courses of enterprise succession as effects of regionally specific institutional differences.
Qualifying the mechanisms of institutional change posterior to an enterprise succession.
Whereas the explanation of regionally specific institutional effects requires a comparative analysis, an explicit process analysis is needed for qualifying the mechanisms of institutional change. Hence, the research design includes a regional comparison between Baden-Württemberg and the Spanish Basque Country, two highly successful and innovative regions characterized by (small and medium-sized) family businesses. By adopting a qualitative panel approach over a period of three years focusing on successors, but also taking into account a firm’s predecessor, employees and related companies, this project uses explicit process analysis for the qualification of mechanisms of institutional change. The general objective of this project is to contribute to a geography of institutional change, and to improve our understanding of differential regional development in order to reduce discrepancies between regulation (policy) and the behaviour of enterprises.

Methods: Interviewing, qualitative panel

Updates
0 new
3
Recommendations
0 new
3
Followers
0 new
39
Reads
0 new
238

Project log

Regina Lenz
added 2 research items
Family firms have multiple nodes that connect them with the regions in which they are located, for example providing jobs and professional training, paying taxes, and engaging in regional philanthropy. The regional anchoring of family firms thus plays an important role in regional economies and, especially, in rural ones. In this sense, family firms’ transgenerational continuity is essential to keeping the regional link stable over time. However, family firm succession threatens not only firm survival but also regional stability. In this sense, the topic of family firm succession has received less academic and policy attention in terms of their regional ties across generations. To begin addressing this issue, I wonder whether successors have the same regional bonds as their predecessors. To investigate how succession affects the regional anchoring of family firms, this chapter analyses the characteristics of successors, their network connections, and their beliefs on how to do business. Based on a qualitative approach and through the lens of an institutional perspective, I explore case studies of successors in Basque family firms and analyse differences in the attitudes and behaviours between predecessors and successors. These differences indicate that successors have weaker regional embedding than their predecessors – i.e., the existence of regional dis-embedding process. This chapter discusses the potential consequences of family firm dis-embedding for regions and their economic development.
Family firms represent the backbone of regional economies in Europe. Yet, due to demographic and societal changes, family firm succession increasingly poses a challenge to both firm continuity and regional stability, which is why policymakers look for appropriate ways to support family firms in their succession processes. In pursuit of policies that fit local institutional conditions, we explore the fact that two structurally similar European regions facing the same succession problem have developed different policies to address it. Using the analytical framework of institutional logics and drawing on 67 interviews with family firms and succession experts in the Spanish Basque Country and the German region of Baden-Württemberg, we find that the different policies are coherent with each region’s unique constellation of the institutional logics of business, family, and community and thus make up distinct regional policy regimes. The paper offers a framework applicable to other regions for making underlying normative behavioural guidelines visible, and for more precisely assessing the relationship between institutions and policies. It contributes to a better understanding of the regional specificity of institutions as a base upon which place-sensitive policies can be developed, or fundamental attempts be made to re-shape institutions by political measures.
Johannes Glückler
added a research item
A key problem of downscaling or transferring policies across regions is embedding these policies into a place for them to unleash the full potential of regional economies. This paper elaborates on the analytical framework of “institutional context” to bridge the gap between rich theorizations and poor empirical capture of institutions in studies of regional development. The institutional context is constituted by three pillars—regulations, organizations, and institutions—as well as by the interrelations between these pillars. Applied to the British region of Coventry and Warwickshire, a qualitative analysis of expert interviews finds institutional patterns of short‐termism, moderate levels of social capital and an embryonic relational infrastructure to constrain the place‐based strategy for industrial diversification. This regional case illustrates the more general challenge for regional policy in the UK of devising place‐based strategies under conditions of continuous rescaling of regional governance and the implementation of a new National Industrial Strategy. In conclusion, the analysis suggests a shift from “nodal” to “linking” policies that support cross‐network connections and help grow a regional field for collective action to cross‐fertilize knowledge and foster innovation and entrepreneurship in emerging industries.
Johannes Glückler
added a research item
This chapter explores the interrelations between institutions, defined as stabilized interaction patterns, and innovation, since successful innovation rests on the design of institutional contexts and since inconsistent institutional contexts constrain or even impede successful innovation. Such situations require processes of adjusting innovations to the institutional context (robust design), circumventing resistant institutional contexts (peripheral dominance), or creating new institutional contexts that fit the innovation process (institutional entrepreneurship). The chapter criticizes studies that focus on formal legislation and regulation as indicators of national institutional variety, while neglecting institutional practices and how these also differ at the sub-national level. From a relational perspective, supportive innovation policies need to respond to geographically and temporally varying institutional contexts even within a single legal and regulatory regime. It is argued that policy needs to understand the interrelationships between institutional practices and innovation, rather than viewing rules and regulations as determinants of innovation outcomes.
Johannes Glückler
added 2 research items
The relationship between geography and the creation, use, and reproduction of knowledge has been at the core of this book series. The previous twelve volumes have focused, among other topics, on the role that creativity, culture, power, networks, science and universities have in cultivating an understanding of how the social process of knowing unfolds in space. They all draw attention to ways in which this process is situated in places and how learning connects people across places. Centering on institutions, volume 13 presents yet another perspective on the spatiality of human knowledge. Across the social sciences scholars have been attributing to institutions a major part in social, political, cultural, and economic development. Although there is agreement on the importance of institutions, there are several understandings of what institutions are and how they influence social life. The purpose of this volume is to examine a rather neglected and only recently acknowledged dimension in institutional theory: the spatiality of institutions, the spatiotemporal dynamics of institutional change, and the role of institutions in the creation and reproduction of knowledge and related social outcomes in bounded territories.
This chapter explores the dynamic nature of institutions in response to changes in regulations and the institutional context. Seeking to refine the understanding of how and to which extent institutions change or sustain, the authors dismantle two institutions by analyzing the dynamics of their form and function separately. They propose a simple taxonomic model that helps explain how institutions can either sustain their form while their function responds to a changing institutional context (institutional drift) or, vice versa, retain their function while adapting their form to an altered context (institutional morphosis). Empirically, the latter case is illustrated by public procurement in Germany’s construction sector, whereas the journeyman years of artisans serve as an example of drift. The authors thus adopt an endogenous perspective and foster finer-grained concepts of institutional change that might help improve the understanding of the workings of policies that are at odds with or consistent with the underlying institutional reality.
Johannes Glückler
added a research item
This paper develops a research agenda toward the systematic inclusion of institutions into the analysis of regional policy effectiveness. Departing from the commonly shared observation that formal rules of regulation and policies not always lead to the intended outcomes, we argue that institutions are crucial mediators of the workings of regulation and regional policies in specific geographical contexts. By defining institutions as stable patterns of interactions based on legitimate mutual expectations (Bathelt and Glückler, 2014), we open analytical scope for analyzing the multiple relations between regulated rules and regular social practice. Hence, we build on Helmke and Levitsky's (2004) conception of the interdependencies between regulation and institutions, and extend their heuristic into a dynamic framework at the regional scale on how to pursue what we call institutional policy-making. RESUMEN: El artículo desarrolla una agenda de investigación orientada a la inclusión sistemática de las instituciones en el análisis de la efectividad de la política regional. A partir de una observación comúnmente compartida de que las reglas formales de regulación y las políticas no siempre conducen a lograr los resultados perseguidos, se argumenta que las instituciones constituyen media-dores cruciales de los trabajos de regulación y de política regional en contextos geográficos específicos. A partir de definir las instituciones como estructuras es-tables de interacciones basadas en las mutuas expectativas legitimizadas (Bathelt y Gluckler, 2014), se abre un campo analítico para analizar las múltiples relacio-nes entre reglas reguladas y prácticas sociales regulares. A partir de ello y sobre la concepción de Helmke y Levitsky (2004) sobre las interdependencias entre regulación e instituciones se extiende su contenido en un marco dinámico a es-cala regional sobre cómo llevar a cabo lo que nosotros llamamos policy-making institucional.
Regina Lenz
added an update
New video available, explaining social institutions as stable patterns of interactions based on mutual expectations, and how they influence daily as well as business life, for example in the case of enterprise succession:
 
Regina Lenz
added a project goal
Social institutions have increasingly become recognized as important factors of economic development. However, institutions vary across regions, and allegedly ‘good institutions’ are hard to imitate or transmit to other locations. For this reason, both institutional research and economic geography face the challenge of understanding the generation and transformation of social institutions.
This inherent processuality can best be studied in situations of change, which is why this research project focuses on enterprise succession in family firms. The situation of enterprise succession, increasingly posing a challenge to the long-term continuity of regionally embedded family businesses all over Europe, serves as both the unit of analysis and the trigger of institutional change in inter-firm interactions. Consequently, this project pursues two objectives:
Explaining different forms and courses of enterprise succession as effects of regionally specific institutional differences.
Qualifying the mechanisms of institutional change posterior to an enterprise succession.
Whereas the explanation of regionally specific institutional effects requires a comparative analysis, an explicit process analysis is needed for qualifying the mechanisms of institutional change. Hence, the research design includes a regional comparison between Baden-Württemberg and the Spanish Basque Country, two highly successful and innovative regions characterized by (small and medium-sized) family businesses. By adopting a qualitative panel approach over a period of three years focusing on successors, but also taking into account a firm’s predecessor, employees and related companies, this project uses explicit process analysis for the qualification of mechanisms of institutional change. The general objective of this project is to contribute to a geography of institutional change, and to improve our understanding of differential regional development in order to reduce discrepancies between regulation (policy) and the behaviour of enterprises.