Place-based entrepreneurs and their competitiveness: a relational perspective on small regional banks

This paper focuses on place-based entrepreneurs as regionally anchored companies that rely on regional resources to generate a sustained competitive advantage, but are increasingly challenged by a seemingly placeless and highly-globalized marketplace. Although there are numerous cases of successful place-based entrepreneurs, the role of place for their competitiveness is an understudied research field. This paper presents an illustrative case study to explore the competitive advantage of small regional banks from Germany, which are prototypical place-based entrepreneurs that successfully compete in the market, but meet important external challenges. By focusing on a relational perspective on the idiosyncratic co-operative relationships of the banks with regional SMEs, the paper finds that the place-based entrepreneurship of the small regional banks is determined by the interplay of static/dynamic proximities in the relationships, which leads to their strength and resilience. These relational and proximity-based benefits result in a strategy of investments by the banks in the relationships with regional SMEs, and the investments, in turn, support the building of a strong regional identity that is shared with the banks and their customers.