Do Competitive Regions Influence Their Neighbours? An Empirical Study of Spatial Spillover Effects in India

Abstract

Regional competitiveness has increasingly become a focal point in economic geography, regional dynamics, and policy design. Cross-regional variations driven by differences in a multitude of factors, such as components of the entrepreneurial ecosystem coupled with socio-economic and external factors, all of which affect the propensity to achieve relative competitive advantage, are often underexplored. Additionally, as regions compete directly or indirectly to attract investments, national projects, and grants, an untapped question arises: whether the success of one region generates broader spatial spillover effects on other regions, or is it an isolated phenomenon? Reviewing the theories and literature, this study proposes that competitive advantages may not be entirely confined within regional boundaries. Instead, they may produce positive and negative externalities (Porter, 2003), or “spillovers,” affecting neighbouring or interconnected regions (Boschma, 2005; Li & Li, 2018).