Leadership and institutional factors in endogenous regional economic development

This paper proposes that a virtuous circle for the sustainable development of a city or region is achieved through a process whereby proactive and strong leadership and effective institutions enhance the capacity and capability of a place to better use its resource endowments and gain an improved market fit in becoming competitive and being entrepreneurial. It is proposed that the performance of a city or region at a point in time and the path of its economic development over time may be represented by its position in a Regional Competitiveness Performance Cube. The paper proposes a new model framework whereby a city or region’s economic development and performance is an outcome dependent on how its resource endowments and market fit as quasi-independent variables are mediated by the interaction between leadership, institutions, and entrepreneurship as intervening variables. The experiences of a number of case study cities from a variety of settings in the US, Europe, Asia and Australia are explored within that framework.