The relationship between intra-metropolitan location, research and development (R&D) and the outsourcing of production is analysed to determine differences in, and the supportive character of, intra-metropolitan areas for high-technology production. Madrid's electronics industries have shown a remarkable resilience, in the face of extensive economic restructuring and the change in trade regimes that has accompanied continental integration. Much of the strength of the electronics sector may have been due to the metropolitan area's support for outsourcing, and the creative specialisation that it facilitated. The distribution of manufacturing establishments, their local sourcing characteristics, industrial district or agglomeration effects, and the role of R&D are evaluated to determine the intra-metropolitan context of production. Extensive statistical analyses of the relationship between R&D and productive performance, with various indicators of capital, costs, revenues and scale, are undertaken with establishment-level survey data. These analyses provide conclusive evidence of the influence of intra-metropolitan location on R&D and internal organisation.
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