Recent research also shows that integration of developing countries to the world economy has implications for the spatial dimension of their industrial development. More precisely, the globalization process has gone hand by hand with a tendency for economic activities to concentrate in certain regions in these countries. Although a very rich literature and many real world examples demonstrate that such agglomerations can exert a positive impact on economic growth and innovation activities, this may not be necessarily the result and the outcome will depend on the specific dynamics of regional networks involved, and on the place of domestic firms in the global commodity chains. The analysis of the economic potentialities associated with the formation of industrial clusters and of economic networks is the starting point of this project.

This project is aimed at examining the origins, the nature and the structure of networks formed among producers in the furniture and machinery sectors located in the greater region of Ankara, two sectors that are of particular economic significance for this region.

First, a thorough review of the economic literature pertaining to industrial clusters and networks, and the relationships between these two concepts and innovation, will be conducted.

Second, a survey will be conducted among a representative sample of randomly selected firms in order to analyze the current state of networks in these two sectors and answer the following questions: (i) who interacts with whom for what type of business (ii) what do the structure of these networks look like, and are they the optimum ones for most efficient knowledge creation and diffusion (iii) what is the structure of social networks among producers, and how are these social networks linked with supply chains ? (iv) is there room for policy and public intervention, and what types of policies can be designed to promote more efficient networking relations among producers in these two sectors ? Graph theory and social network analysis will be relied upon in order to detect networks and carry out a network analysis.

We expect the results of this project to be important especially in two fields. First, since the project will help identify problems and barriers producers face in interactions with each other, we will be in a position to highlight those areas that need improvement and the types of measures that should be implemented in order to overcome barriers to higher performance in these two sectors. Secondly, there are very few, if any studies investigating the structure of networks formed by firms in the Turkish economy, and the importance as well as the nature of these networks. In this respect, the results of the projects will fill a gap in the applied literature concerning Turkey. Moreover, the results of the project are planned to be submitted to international acclaimed journals in order to contribute to the growing literature on industrial networks.