1 EUROPEAN CONGRESS OF THE REGIONAL SCIENCE ASSOCIATION, AUGUST 29 – SEPTEMBER 1, 2000, BARCELONA Local Development, Big Firms and Social Capital (nr.380) Marco Bellandi Dipartimento di Scienze economiche, Università degli Studi di Firenze. Address: Facoltà di Economia, Via Curtatone 1, 50123 Firenze, Italy, Tel. +39-0552710-413, Fax. +39-0552710-424 marco.bellandi@cce.unifi.it, http://www.cce.unifi.it/dse/mbelland.htm Abstract: Working on various streams of literature concerning multinational and re- gional development, a classification of potential linkages between big firms and local economies will be proposed. Then, building on a model of a strong local economy, that is the industrial district, a framework will be sketched in which different combinations of linkages are put in relation with different pools and degrees of strength of social capital and other local factors. The main thesis is that reciprocal positive linkages are more probable where and when the local (social) capital is neither too weak nor too strong. Some final remarks will concern the debate on policies fostering the develop- mental role of multinational in local economies. 1. Introduction: Two engines of industrial development According to a recent statement by G. Becattini (1998), the Italian economic growth in the last decades has been pulled by ‘two types of industrial engine’, each one with its own logic. They are the big firms and the industrial districts characterised by clusters of small-specialised firms 1 . Since recently, the relations between the two en- gines have not been the object of deep investigation. According to the mainstream, there is just one engine of growth, that is big efficient firms; and small firms’ vitality is either the manifestation of interstitial life, or the result of strategies of production subcon- tracting controlled by big firms. A starting point of the literature on Italian industrial districts, since the end of the Seventies, was precisely the rejection of the standard interpretation. This well explains the focus on cases and models in which district small firms are clearly separated from the activities of big firms, while embedded in a local context allowing a rich reproduc- tion of social capital, entrepreneurial attitudes, focussed industrial competencies. An important exception to such focus is the investigation on the phases of birth of industrial districts. Here, a positive if transitory role of units of big firms, either in-