Inter-Firm Relations and Regional Development: Experiences from the Central Visayas, Philippines

In spite of economic globalisation and new technologies that 'shrink' the world, locality and proximity remain important for businesses. Many firms may increasingly be inserted into global chains of production, but the local environment in many ways remains the key playing field for entrepreneurs. Embedded in a relational economy, 'the local' presents powerful institutional opportunities and constraints for firms. In the central Visayas Islands of the Philippines, insertion into the global economy has been a patchy process, creating remarkably different production networks in the three neighbouring provinces of Bohol, Cebu and Negros Oriental. Despite their geographical proximity and shared national institutional framework, these provinces have clearly distinct economic structures and development paths. They thus allow a comparative analysis of the role of regional institutions. How is this diversity reflected in terms of regional differences in inter-firm networks, both in vertical production chains and in regionally embedded horizontal networks? And how do differences in networking affect economic activity and development in the provinces? Using key elements of Whitley's comparative business systems approach at the sub-national level, this paper seeks answers to these questions.