ABSTRACT
Embeddedness is recognised as having four basic forms – cognitive, cultural, political, and structural. Cognitive embeddedness identifies the bounded rationality of economic actors and place-based knowledge. Cultural embeddedness recognises the importance of shared collective understandings in decision-making and goal formulation amongst firms doing business in a place. Political embeddedness recognises the place-based impact on firms' business decisions of struggles with non-market institutions that might just as easily foster them or constrain them to the point of failure. At the heart of the embeddeness thesis, however, is structural embeddedness which identifies the manner in which business enterprises are incorporated into local, place-based networks that facilitate and promote information exchange and learning. Furthermore, the model, built on the concept of embeddedness in geography and development studies, is increasingly being criticised. The chapter also presents an overview of key concepts discussed in this book.
