Firms’ competitiveness and willingness to accept external equity in industrial districts

External investor participation in industrial districts has increased in recent decades, yet little is known about why some SMEs accept external equity while others do not. We examine how firm competitiveness and industrial district membership jointly shape equity willingness. We argue that district externalities substitute for the strategic resources typically provided by external investors, but that this substitution depends on firms’ competitive capabilities. We further propose that this effect is bounded: beyond a high level of competitiveness, district firms adopt an internally governed strategic logic that renders their equity preferences indistinguishable from comparable non-district firms. We test these arguments using ordered logit models on primary survey data, combined with secondary data from the SABI database, from 133 exporting SMEs in La Rioja, Spain, collected in 2025. The results reveal a negative interaction between competitiveness and district membership on equity willingness, with a threshold at the 75th percentile of the competitiveness distribution beyond which the interaction disappears. These findings advance research on industrial districts and entrepreneurial finance by showing that openness to external equity depends jointly on territorial context and competitive capabilities, informing policies to sustain district-based competitive advantages.