Liabilities in the Prato Industrial District. An analysis of failures of Italian and Chinese firms

The study of liabilities for firms competitiveness is an important issue in recent years, as firms are facing an increasingly fierce competition in a financial and economic recession period without equal. Industrial districts are also experiencing profound transformations due to the globalisation process and arising competition from developing countries and local immigrants firms. This chapter develops a study on firms liabilities in the Prato Industrial District, through an analysis of failures of Italian and Chinese firms. The aim of this chapter is to contextualize the concept of liabilities in the organizational ecology theory, in order to propose a quantitative approach to investigate them. Its contribution is to consider the several dimensions of liability a firm has to overcome in order to survive in an organizational population. We adopt an organizational ecology approach to study multi-population failures in the Prato industrial district from 1990 to 2012. We construct a model of multi-population of Chinese and Italian firms’ failures in order to investigate their evolution along time. The results underline that the position of firms in strategic networks is of crucial importance, in particular at international levels (global value chains), drawing their attention to the strategic firms position in the background of production and social relations of the district.