The Dynamic Evolution of the Proximity Effect in the Textile Industry

This paper tests the evolution of the relationship between localization and proximity and their effect on firm performance for a sample of 10,490 Spanish textile firms in the period 2001--2006. Using coefficients of specialization two levels of geographical disaggregation are distinguished: (i) the provincial cluster and (ii) the industrial district. The results obtained show a positive and significant impact of the specialization level on productivity, both for industrial districts and provincial clusters (in this case only when the levels of specialization are high enough). In general, the effect is higher for industrial districts than for provincial clusters, although in both cases it decreases with time. Given that in most EU countries the textile industry has a tendency to be geographically concentrated in industrial districts, these results carry important implications for the textile industry.