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Using the Social Capital theoretical framework, territorial agglomerations of firms, such as in the industrial district, can be identified as dense strong-tie networks and are thus suitable for exploiting activities. This paper addresses the possible exploring limitations of these clustered firms. Following alternative explanations, such as the structural holes and weak tie approaches, it is proposed that local institutions may play a role as intermediary agents between external disperse networks and internal dense networks, therefore enabling these firms to deal with the requirements of an ever-changing environment. The paper also develops an empirical section where the Spanish ceramic tile industrial district is described in order to illustrate theoretical arguments. Findings suggested a number of ways in which local institutions may facilitate the creation of value for firms. Particularly, local institutions interact with many external firms and institutions and undertake research projects with local firms. In addition, some quantification of the participation of firms in the activities carried out by institutions is offered, suggesting explanations for the barriers that prevent firms from gaining direct access to external networks. [ABSTRACT FROM AUTHOR]

Determination of optimal population densities underlies the economic rationality when planning the provision of basic public infrastructure by local governments. Using econometric techniques based on the translog cost function, we investigate the existence of economies of scale, associated to a larger urban size in terms of population and housing, determine the effect of alternative urban patterns - compact or dispersed - on the cost of provision, and calculate optimal population densities as targets for urban planning. We illustrate the practicality of our model using Spanish municipal data, and unveil latent economies of scale and suboptimal urban densities due to excessive dispersion. Based on these findings we propose specific policy guidelines in terms of desirable urban structures. [ABSTRACT FROM AUTHOR]