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Publications | Daniel Felsenstein

Publications

1996
High Technology Firms and Locational Choice in Israel, A Look at the Determinants
D., Felsenstein . 1996. “High Technology Firms and Locational Choice in Israel, A Look at the Determinants”. Geografiska Annaler 78B(1):43-55. Retrieved (). Publisher's VersionAbstract
This paper investigates the tendency of high technology firms in Israel to choose metropolitan locations. A series of hypotheses are presented that link this spatial behavior with the firms' life cycle characteristics, its' network context and technological characteristics. These hypotheses are then structured in a causal framework and the choice of metropolitan location is modeled as a discrete choice problem. Firm behavior is taken as utility-maximizing rather than profit-maximizing. Empirical results, based on a survey of over 160 Israel high technology firms are presented.These suggest that the choice of metropolitan location is often used to substitute for disadvantages that the firm experiences. For example, metropolitan location for new firms can mitigate the negative effects associated with a precarious market position; for firms with weak network structures, metropolitan location can substitute for this drawback. The public policy implications of these findings with respect to prospects for network-based regional development in Israel, are also discussed.
Factors Affecting the Development and Growth of Small Firms; Findings from Peripheral Areas in Israel
D., Felsenstein, and Schwartz D. 1996. “Factors Affecting the Development and Growth of Small Firms; Findings from Peripheral Areas in Israel”. Horizons in Geography 44-45:27-42. Retrieved (). Publisher's Version
D., Felsenstein . 1996. “High Technology Location and Metropolitan growth”. Pp. 217-226 in Gradus Y and Lipshitz G (eds), The Mosaic of Israeli Geography. Beer Sheva: Ben Gurion University Press of the Negev.
1995
D., Felsenstein . 1995. “Dealing with 'Induced Migration' in University Impact Studies”. Research in Higher Education 36(4):457-472. Retrieved (). Publisher's VersionAbstract
The migration-inducing effect of an institution of higher education is often overlooked in university impact studies. This paper deals with estimating the local economic impacts of a university accounting for the fact that students and staff induced to the area by the presence of the university are unlikely to remain in its absence. It is argued that this is an important aspect of the correct identification of the counterfactual position and a vital component in accurate impact analysis. A case study is presented relating to the short-term impacts of the Northwestern University campus in the city of Evanston, Illinois. The tendency to overstate this impact through the incorrect treatment of induced migration is illustrated. It is also shown that the estimated income and output impacts attributed to the university are very sensitive to changes in the local consumption patterns of migrants.
1994
University-Related Science Parks - 'Seedbeds' or 'Enclaves' of Innovation?
D., Felsenstein . 1994. “University-Related Science Parks - 'Seedbeds' or 'Enclaves' of Innovation?”. Technovation 14(2):93-110. Retrieved (). Publisher's VersionAbstract

This paper examines the role of science parks as ‘seedbeds’ of innovation. Making the distinction between the spatial and the behavioural conceptions of the seedbed metaphor, the paper surveys the evidence related to the limited interaction effects between science park firms on the one hand and their neighbouring park firms, local universities and off-park firms on the other. This suggests that science parks might be functioning as ‘enclaves’ of innovation rather than seedbeds.

This hypothesis is empirically tested on the basis of a survey of over 160 high-technology firms in Israel located both on and off-park. Specifically, the following questions are addressed: (1) are seedbed effects important inputs to a firm's innovation level? and (2) to what extent are these effects contingent on the physical proximity and clustering afforded by science park location? The results indicate that, first, seedbed effects, as indicated by level of interaction with a local university and the entrepreneur's educational background, are not necessarily related to the firm's innovative level; second, science park location is shown to have only a weak and indirect relationship with innovation level. It is proposed that the role of the science park is thus innovation-entrenching rather than innovation-inducing. The attraction of science park location could therefore be due to perceived status and prestige conferred rather than benefits in terms of technology transfer and information flow.

Large High Technology Firms and the Spatial Extension of Metropolitan Labor Markets; Some Evidence from Israel
D., Felsenstein . 1994. “Large High Technology Firms and the Spatial Extension of Metropolitan Labor Markets; Some Evidence from Israel”. Urban Studies 31(6):867-883. Retrieved (). Publisher's VersionAbstract
The role of large high-technology firms in fashioning the spatial extent of the labour markets that serve them, is examined in this paper. It is argued that the demand for highly skilled labour in these firms results in their active role in labour market extension through a strategy of employee transport. This makes for employment mobility without a commensurate impact on residential mobility. It can also result in the 'inclusion' or 'exclusion' of certain types of labour. In this context, the 'free-rider' phenomenon associated with worker transport is identified and described. On the basis of an empirical study of some of the largest high-technology firms in metropolitan areas in Israel, these processes are illustrated. The labour markets serving these firms are delimited and characterised for employees of different skill levels. In addition, the determinants of the probability of the firm utilising spatially extensive labour markets is examined. The role of firm size in explaining this behaviour is stressed.
Commuting and the Extension of Spatial Labour Markets by Large High Technology Firms
D., Felsenstein . 1994. “Commuting and the Extension of Spatial Labour Markets by Large High Technology Firms”. Horizons in Geography 40-41:17-42 (Hebrew). Retrieved (). Publisher's Version
D., Felsenstein . 1994. “Are Subsidies Worth It? How to Calculate the Costs and Benefits of Business Incentive”. Economic Development Commentary, 18(3):17-23.
1993
Constraints to Small Business Development Across the Life Cycle; Some Evidence from Peripheral Areas in Israel
D., Felsenstein, and Schwartz D. 1993. “Constraints to Small Business Development Across the Life Cycle; Some Evidence from Peripheral Areas in Israel”. Entrepreneurship and Regional Development, 5:227-246. Retrieved (). Publisher's VersionAbstract
This paper suggests that the constraints to small business development are likely to vary across the firm's life cycle. In addition, small businesses operating in peripheral areas are likely to face growth constraints arising from their location. On the basis of survey evidence from 100 small (owner-managed) firms operating in both peripheral and central locations in Israel, the probability of encountering a constraint (capital, marketing or bureaucratic) is then estimated. This probability is estimated for two points in the firms' development trajectory: the start-up stage and the stage of sustained operation. The results suggest that at the start-up stage the personal attributes of the entrepreneur serve to mitigate the odds of encountering a constraint while firm size increases the chances. At the operating stage, the personal characteristics of the owner and the form of economic activity are found to be influential. The conclusions point to the high opportunity costs associated with small firms in peripheral areas and to the role of firm size in mitigating the effects of finance constraints over the life cycle. The broad policy implications of these findings are outlined.
1992
The Role of Production, Market and Employment Linkages in Regionally-Based Industrial Development
D., Felsenstein . 1992. “The Role of Production, Market and Employment Linkages in Regionally-Based Industrial Development”. Tidschrift voor Economische en Sociale Geografie 83(2):105-119.
High Technology and Urban Economic Development
A., Shachar, and Felsenstein D. 1992. “High Technology and Urban Economic Development”. Urban Studies 29(6):839-855. Retrieved (). Publisher's VersionAbstract
This paper examines the economic development prospects for urban areas arising from localised clusters of high technology activity. Economic development opportunities are expected to be expressed in the development of local linkage patterns: employment linkages, production and service linkages and linkages to local universities. On the basis of survey evidence of high technology firms from two urban areas in Israel, linkage patterns are found to be weakly developed locally but extensively developed nationally and internationally. This is explained as a result of the international character of Israeli high technology activity resulting in a limited effect on the development of the local urban economy. Policy implications for urban economic development point to the need for the formulation of a public policy executed and administered at the local level rather than the present system of central government targeting of urban economic development at select locations.
D., Felsenstein . 1992. “Assessing the Employment Effectiveness of Small Business Financing Schemes; Some Evidence from Israel”. Small Business Economics 4:273-285. Retrieved (). Publisher's VersionAbstract

This paper presents an empirical assessment of the employment effects of two assistance schemes aimed at improving the accessibility of small businesses to capital. The first scheme is a revolving loan fund operating in two small towns. The second is a capital grant scheme aimed at promoting industrial activity in rural areas. Empirical data relating to the period 1986–89 is analysed for both schemes.

The employment effectiveness of the loan fund is analysed via the estimation of cost-per-job indices and the estimation of the ‘deadweight’ effect, i.e., employment that would have been created even in the absence of the financing scheme. For the grant scheme, the methodology implemented involves the use of regression techniques in order to isolate the effect of the financial assistance on employment generation. The results point to the cost-effectiveness of this form of assistance. From a public policy point of view, the need for targeting these type of schemes (both spatially and sectorally), is stressed.

1991
The Science Park as an Urban Growth Factor in Israel
D., Felsenstein . 1991. “The Science Park as an Urban Growth Factor in Israel”. Horizons in Geography 33-34:73-86 (Hebrew). Retrieved (). Publisher's Version
D., Felsenstein . 1991. “The New Geography of High Technology Industries in Israel”. Pp. 65-84 in Surkis H., Rap E. and Shachar T. (eds), Changes in the Geography of Israel; Center versus Periphery . Jerusalem: Ministry of Education and Culture (Hebrew).
1990
Technological Change and New Patterns of Industrial Location
R., Bar-El, and Felsenstein D. 1990. “Technological Change and New Patterns of Industrial Location”. Horizons in Geography 28-29:87-98 (Hebrew). Retrieved (). Publisher's VersionAbstract
בדיקה מדוקדקת של ההתנהגות המרחבית של מפעלי התעשייה מן הסוגים השונים ואיתור סוגי הפעילויות המסוגלים להתקיים בפריפריה.
The Spatial Linkage Patterns of Israeli Firms; Implications for Regionally-Based Industrial Development
D., Felsenstein . 1990. “The Spatial Linkage Patterns of Israeli Firms; Implications for Regionally-Based Industrial Development”. The Economic Quarterly 144:51-64 (Hebrew). Retrieved (). Publisher's VersionAbstract
המאמר בודק את דפוסי הקשרים המרחביים שיש למפעלים תעשייתיים בארץ. קשרים אלה באים לידי ביטוי בקשר שיש למפעל עם גורמי ייצור ועם השוק. לדפוסי הקשרים האלה יש השלכות לגבי הפיתוח התעשייתי האזורי, במיוחד באזורים פריפריאליים.
הבדיקה נעשתה על בסיס מדגם של 200 מפעלים מהסקטור העירוני (ערים מרכזיות וערי פיתוח) והכפרי. ההשערה המרכזית היא שלמפעלים בסקטורים שונים קיימים דפוסי קשרים שונים. הגורמים המשפיעים על דפוסי קשרים אלה נגזרים הן מאופי הפעילות התעשייתית של המפעל והן מאופי הסביבה שבו הוא פועל.
הממצאים מצביעים על כך שקיימים הבדלים ברורים בין הסביבות שבהן פועלים המפעלים מהסקטורים המרחביים. לעומת זאת, לאופי הפעילות התעשייתית, כגון רמת התחרותיות והתחכום של התוצר, ישנה השפעה רבה יותר על הנטייה לייצור קשרים מרחביים מקומיים. ההשלכות של ממצאים אלה לגבי הפיתוח התעשייתי באזורים פריפריאליים ומשמעותם לגבי המדיניות התעשייתית-מרחבית הקיימת, נדונים במאמר.
Entrepreneurship and Rural Industrialization; Comparing Patterns of Rural and Urban Locational Choice in Israel
R., Bar-El, and Felsenstein D. 1990. “Entrepreneurship and Rural Industrialization; Comparing Patterns of Rural and Urban Locational Choice in Israel”. World Development 18(2):257-267. Retrieved (). Publisher's VersionAbstract
The role of the local entrepreneur in the development of rural industrialization is often overlooked. Based on an empirical survey of entrepreneurs in both urban and rural areas in Israel, this paper shows that the rural setting scores less favorably than the urban for nearly all those locational attributes that would attract industrial development. Consequently, the chances of attracting external initiatives to rural areas would seem slim. Instead, it is argued that a strategy for rural industrial development needs to be based on the mobilization of indigenous entrepreneurial potential for which the rural setting provides a subjective relative advantage.
Technological and Locational Factors in Rural Industrialization; A Comparative Investigation
D., Felsenstein, and Bar-El R. 1990. “Technological and Locational Factors in Rural Industrialization; A Comparative Investigation”. Pp. 235-259 in Ciciotti E., Alderman N. and Thwaites A. (eds), Technological Development in a Spatial Context; Theory, Empirical Evidence and Policy. Heidelberg: Springer Verlag Retrieved (). Publisher's Version
1989
Technological Profile and Industrial Structure; Implications for the Development of Sophisticated Industry in Peripheral Areas
R., Bar-El, and Felsenstein D. 1989. “Technological Profile and Industrial Structure; Implications for the Development of Sophisticated Industry in Peripheral Areas”. Regional Studies 23(3):253-266. Retrieved (). Publisher's VersionAbstract
This paper outlines the prospects for the development of sophisticated industry in peripheral and semi-peripheral areas. The debate on this issue usually presents a rigid and bifurcated image of large capital-intensive plants in the periphery and the seemingly unyielding concentration of R&D in central locations. A major claim here is that this image can be softened-up if a more integrative definition of the term ‘technology’ is taken. A methodological approach for assessing the level of technology of the industrial branch is therefore introduced. A multi-dimensional approach is adopted that classifies industries into ‘technological profiles’ based on the different combinations of aspects of technology that they embody. This methodology is applied empirically to a data-set based on sub-branches of Israeli industry at the SIC three-digit level and the main industrial characteristics of the technological profiles are analysed. Having established the industrial consistency of the technological profiles, their spatial behaviour is addressed with a view to identifying those profiles with a tendency to disperse to the national periphery and those with a tendency to concentrate in central areas. Evidence from Israel shows that two types of profile can exist in peripheral areas: operations that use sophisticated production processes and under certain conditions and, at particular scales of activity, small-scale R&D operations not requiring large capital investment. Finally, the industrial characteristics needed to sustain the above process are outlined. In the case of Israel it is shown that those characteristics relating to the inputs (especially quality of labour), rather than those relating to the outputs or spatial linkages of the production process, are likely to act as the main constraints to the development of sophisticated industry in peripheral areas.
Measuring the Technological Intensity of the Industrial Branch; A Methodological and Empirical Approach
D., Felsenstein, and Bar-El R. 1989. “Measuring the Technological Intensity of the Industrial Branch; A Methodological and Empirical Approach”. Research Policy 18:239-252. Retrieved (). Publisher's VersionAbstract
This paper contends that most definitions of what comprises a “high technology” industry are based on only one defining characteristic. It is argued that an adequate definition needs to be based on a multi-dimensional view of technology and a methodological approach is suggested for classifying industrial sectors into “technological profiles” on the basis of the various aspects of technology that they embody. Based on this methodology, an empirical study based on sub-branches of Israeli industry (at the 3 digit SIC level) is presented. Using cluster analysis and analysis of variance it is shown that the technological profiles have similar industrial, and not just technological, characteristics. The policy implications of these findings point to the need for a definition of “high technology” that caters to the policy needs and objectives for which it is being defined.