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Territorial capital as a source of firm competitive advantage: evidence from the North and South of Italy

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  • Valentina Morretta
  • Stephen Syrett
  • Leandro Sepulveda Ramirez

Abstract

This paper investigates how territorial capital, defined as a ‘mix‘ of tangible and intangible local resources accumulated over time across different territories, becomes a source of competitive advantage for firms. The study draws upon semi-structured interviews with firms' owner-managers operating in the North and South of Italy and shows how local resources generate firms' costs and differentiation advantages through acting as territorial externalities or becoming an essential core asset to the firm. Results demonstrate how local resources are highly interconnected, making territorial capital unique in each place and not easily imitable, which ensures long term competitive advantages for those firms that benefit from its endowment. A mix of advanced local resources developed through long term investment is shown to be more valuable for firms than inherited resources, provided by ‘God’ or ‘ancestors’. Using the concept of territorial capital in this manner provides insights into understanding sources of firm competitiveness related to location and the persistence of territorial economic disparities.

Suggested Citation

  • Valentina Morretta & Stephen Syrett & Leandro Sepulveda Ramirez, 2020. "Territorial capital as a source of firm competitive advantage: evidence from the North and South of Italy," European Planning Studies, Taylor & Francis Journals, vol. 28(12), pages 2390-2408, December.
    • Handle: RePEc:taf:eurpls:v:28:y:2020:i:12:p:2390-2408
    DOI: 10.1080/09654313.2020.1722067
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    Cited by:

    1. Valentina Morretta, 2021. "Territorial capital in local economic endogenous development," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(1), pages 103-119, February.

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