Linkage Lock-in and Regional Economic Development: The Case of the Øresund Medi-tech Plastic Industry

Henrik Sornn-Friese, Janne Simoni Sørensen

    Research output: Working paperResearch

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    Abstract

    This paper investigates barriers to the process of regional economic development from a linkage perspective. It develops the concepts of linkage lock-in and switching costs as fundamental factors explaining some of the social dynamics of the process. The overall claim of the paper is that different types of costs and their determinants may lock firms in to existing linkages, creating a probable barrier to successful regional economic development. The paper defines linkage lock-in as the difficulty in switching to alternative linkage partners, even if this is desirable. Switching costs are the costs involved in terminating and forming linkages. The extent of transaction costs, dynamic transaction costs and opportunity costs delineate switching costs in interfirm linkages. The paper further elaborates on the concept of opportunity costs; it states that in dynamically competitive environments a class of opportunity costs, namely learning opportunity costs might arise as a result of the relative importance of learning and innovation. Learning opportunity costs are defined as the costs of missing key possibilities to learn in dynamically competitive environments. They are furthermore seen as being constituted by cognitive costs, which in turn are influenced by the existence of information costs. The theoretical argument is illustrated by a case study of the medical part of the Øresund medi-tech plastic industry.
    Original languageEnglish
    Place of PublicationCopenhagen
    PublisherLOK Research Center. CBS
    Number of pages27
    ISBN (Print)8791181437
    Publication statusPublished - 2003
    SeriesLOK Working Paper
    Number2/2003
    ISSN1600-4264

    Keywords

    • Regional economic development
    • Interfirm linkages and switching costs
    • Lock-in and learning
    • Cross-border business
    • Medi-tech plastic industry

    Cite this

    Sornn-Friese, H., & Simoni Sørensen, J. (2003). Linkage Lock-in and Regional Economic Development: The Case of the Øresund Medi-tech Plastic Industry. Copenhagen: LOK Research Center. CBS. LOK Working Paper, No. 2/2003
    Sornn-Friese, Henrik ; Simoni Sørensen, Janne. / Linkage Lock-in and Regional Economic Development : The Case of the Øresund Medi-tech Plastic Industry. Copenhagen : LOK Research Center. CBS, 2003. (LOK Working Paper; No. 2/2003).
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    Linkage Lock-in and Regional Economic Development : The Case of the Øresund Medi-tech Plastic Industry. / Sornn-Friese, Henrik; Simoni Sørensen, Janne.

    Copenhagen : LOK Research Center. CBS, 2003.

    Research output: Working paperResearch

    TY - UNPB

    T1 - Linkage Lock-in and Regional Economic Development

    T2 - The Case of the Øresund Medi-tech Plastic Industry

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    AU - Simoni Sørensen, Janne

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    N2 - This paper investigates barriers to the process of regional economic development from a linkage perspective. It develops the concepts of linkage lock-in and switching costs as fundamental factors explaining some of the social dynamics of the process. The overall claim of the paper is that different types of costs and their determinants may lock firms in to existing linkages, creating a probable barrier to successful regional economic development. The paper defines linkage lock-in as the difficulty in switching to alternative linkage partners, even if this is desirable. Switching costs are the costs involved in terminating and forming linkages. The extent of transaction costs, dynamic transaction costs and opportunity costs delineate switching costs in interfirm linkages. The paper further elaborates on the concept of opportunity costs; it states that in dynamically competitive environments a class of opportunity costs, namely learning opportunity costs might arise as a result of the relative importance of learning and innovation. Learning opportunity costs are defined as the costs of missing key possibilities to learn in dynamically competitive environments. They are furthermore seen as being constituted by cognitive costs, which in turn are influenced by the existence of information costs. The theoretical argument is illustrated by a case study of the medical part of the Øresund medi-tech plastic industry.

    AB - This paper investigates barriers to the process of regional economic development from a linkage perspective. It develops the concepts of linkage lock-in and switching costs as fundamental factors explaining some of the social dynamics of the process. The overall claim of the paper is that different types of costs and their determinants may lock firms in to existing linkages, creating a probable barrier to successful regional economic development. The paper defines linkage lock-in as the difficulty in switching to alternative linkage partners, even if this is desirable. Switching costs are the costs involved in terminating and forming linkages. The extent of transaction costs, dynamic transaction costs and opportunity costs delineate switching costs in interfirm linkages. The paper further elaborates on the concept of opportunity costs; it states that in dynamically competitive environments a class of opportunity costs, namely learning opportunity costs might arise as a result of the relative importance of learning and innovation. Learning opportunity costs are defined as the costs of missing key possibilities to learn in dynamically competitive environments. They are furthermore seen as being constituted by cognitive costs, which in turn are influenced by the existence of information costs. The theoretical argument is illustrated by a case study of the medical part of the Øresund medi-tech plastic industry.

    KW - Plastindustri

    KW - Regionaludvikling

    KW - Strategisk planlægning

    KW - Strategiske alliancer

    KW - Regionaløkonomi

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    KW - Regional economic development

    KW - Interfirm linkages and switching costs

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    KW - Medi-tech plastic industry

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    BT - Linkage Lock-in and Regional Economic Development

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