Networking: a question of firm characteristics? The case of the Shannon region in Ireland

A large body of the literature on networking has brought to the fore the advantages of proximity between actors in spatially confined enclaves such as industrial districts and local systems of innovation. Through transaction cost minimisation and knowledge exchange advantages, networking in these special enclaves leads to higher firm performance. Seen therefore as a core dynamic of the regional economic process, networking is an important tool of regional and industrial policy at both the EU and Irish levels. Globalisation, which reaches its paroxysm in the case of a small and open economy such as Ireland, raises the relevance of geographical proximity as an important element in networking. This article addresses this topical issue by using a descriptive analysis drawn from a survey of 126 firms from three industries carried out in 2005 in the Shannon region of Ireland. One key finding is that networking, defined as material linkages, is more likely to involve firms in the international market than firms at lower geographical levels. Also, networking is influenced by certain firm characteristics such as ownership, size and age.