a subsector approach to small enterprise promotion and research abstract this paper introduces a diagnostic research methodology designed to help target small enterprise development efforts in less developed countries it argues that research should focus on commodity specific subsectors which include the competing channels and supporting input and output linkages of small firms using this approach analysts can improve their understanding of small enterprise dynamics interventions that may promote them at low cost and policies that constrain small firm growth

the metamorphosis of development economics abstract the scientific paradigm of development economics is not dead nor is it declining in importance instead it has desynthesized into more than 30 analytical and specialized subparadigms which deal with the complex economic phenomena in ldcs the great number of sub disciplines of development economics is a verification of the dynamic evolution of the discipline and shows its trend towards increased specialization which seems to be the true index of the scientific progress of the subject for those who complain that the current output of new development theories is smaller w a lewis we remind them that development economics is a discipline which has more of a praxeological concrete orientation than a theoretical abstract one it seems that the world today needs more the exercise of development praxeology by the activist than the abstract theorizing of the purists however the study and empirical research of development phenomena in the context of the 30 or more specialized sub disciplines offers an opportunity for improving the quality of our knowledge on these phenomena by the recurrent validation and consolidation of development theories

of networks and markets the rise and rise of a south indian town the example of tiruppur s cotton knitwear industry abstract tiruppur town is the center of a tightly clustered range of activities related to the cotton knitwear industry the successful and dramatic expansion which has taken place over the last 15 years has meant many more jobs limited technological improvement improved quality in yarn and fabric and an increasingly diverse range of garments for the larger firms in the industry access to export markets has been the driving force to improving their competitiveness wages remain low and working conditions poor however perhaps partly because capital concentration has not on the whole been accompanied by centralized vertically integrated production nevertheless clustering and dense interfirm networks provide advantages for firms of all sizes since process specialization is spatially divisible

small industry in developing countries a discussion of issues abstract this paper first examines the changing size distribution of industry in developing countries by region and over time and by reference to firm level surveys it discusses the underlying causes the importance of markets generated by the growth of agriculture and rural incomes for the regional development of industry both small and large scale is noted second it discusses the entrepreneurship issue arguing that while small and largefirms alike are highly responsive to the growth of markets the measured entrepreneurial response is neither as full nor as efficient as is desirable the third and last part discusses small industry programmes and their relation to development policy financing and extension programmes are considered in detail and there is a discussion of the risks involved some parallels with agricultural credit are discussed in particular the default problem and the problems associated with concessionary finance it is also argued that small industries and by implication the programmes intended to support them would stand to benefit from more efficient and also more labour demanding policies towards agriculture and industry

truth trust and market transactions what do we know john humphrey and hubert schmitz have recently made an important contribution to the literature on trust and economic transactions between firms unfortunately the evidence that high levels of societal trust contribute significantly to economic growth is far less reliable than they suggest we need more research but research informed by greater conceptual clarity about trust and the institutional arrangements that contribute to trust the framework presented here for conceptualising the various sources of trust should help guide empirical research

from technological catch up to innovation based economic growth south korea and taiwan compared abstract this paper sets out to analyse the divergent models pursued by south korea and taiwan in regard to technological catching up and their ongoing transition towards innovation based economies it is found that south korea s former high debt and chaebol dominated model inclined it to pursue a schumpeterian scale based technological development while taiwan s former pro stability small and medium sized enterprise sme based model tended to favour its emphasis on a neo marshallian network based technological development it will be argued that the state s approach to economic liberalisation and firms demand for capital for technological upgrading are the major factors that have underpinned the adjustment efforts of these two countries

upgrading in global value chains lessons from latin american clusters it has been shown that clustering helps local enterprises in industrial districts overcome growth constraints and compete in distant markets in advanced and less developed countries nevertheless recent contributions have stressed that more attention needs to be paid to external linkages and to the role played by global buyers to foster upgrading at cluster levels in this study we contribute to this debate focusing on the analysis of the relationships existing between clustering global value chains upgrading and sectoral patterns of innovation in latin america we find that sectoral specificities matter and influence the mode and the extent of upgrading in clusters integrated in global value chains

upgrading traditional technologies in small scale industry clusters collaboration and innovation adoption in indonesia there is by now sufficient evidence that small scale industry clusters matter in developing countries this article intends to contribute to the discussion on cluster transformation by focusing on innovation adoption in a roof tile cluster in indonesia clustering allows small scale enterprises to grow in riskable steps by sharing the costs and risks through collaboration using data from longitudinal field surveys we find that technological change is not only a matter of comparing costs and benefits of technologies but also a matter of access collaboration among leaders is crucial in innovation adoption when technological indivisibilities play a role in our case study it appears that joint action should be viewed as a means to an end only it was given up in favour of traditional hierarchies in the cluster as soon as possible

india s industrial development an interpretative survey in recent years there has been a significant shift in indian industrial strategy from a heavily regulated and inward oriented structure toward significant liberalization in both domestic and trade policy at the same time indian industry has sustained its historically impressive growth performance the two waves of liberalization in the 1980s and after 1991 have been associated with significant structural change there is some question however as to whether this change in strategic orientation is consistent with rising per capita incomes this paper reviews these changing strategic perspectives and the economic performance of the industrial sector in the post independence period it concludes that most studies which have been undertaken of indian industrialization have been macroeconomic in nature and that there has been a poor tradition of microeconomic research into the determinants of industrial competitiveness

the economics of development a survey i the subject our definition of the subject will be the use of economic analysis to understand the economies of poor or developing countries this includes in particular how standards of living in the population are determined and how they change over time and further how policy can or should be used in the influence of these processes the definition contains in principle much or most of analytical methods in economics insofar as they can be put to use in the examination of the issues of interest this is as it should be but it poses a problem for a survey in a journal a comprehensive treatment is infeasible so we shall follow a different route the survey will focus on what i take to be the major themes and approaches which characterise the productive aspects of the subject there is therefore no pretence at being exhaustive the purpose is rather to highlight some of the advances many of these have been of real substance there are a number of possible purposes for a survey and it is important to be clear at the outset for whom it is intended what it is and what it is not this survey is addressed to economists and students of economics who know the tools of their trade but not necessarily how they have been applied to and fashioned for the analysis of the economics of developing countries it is a description of the ways in which problems can be productively formulated and approached in terms of examples chosen for their intrinsic importance and interest the vastness of the subject means that we have to be highly selective it does not seek to provide a summary evaluation of the current view of the appropriate response to immediate policy questions it is not a history of thought nor a research manifesto nor an attempt to adjudicate or settle the major debates where they arise naturally from the major purpose some judgements on these subjects will be offered but they do not themselves constitute the primary intent of this survey there are three lines of enquiry or sets of questions which have i suggest been distinctive of the most fruitful work in development economics they will

regional growth linkages from agriculture pioneering research on downstream linkages from agriculture is said to demonstrate that consumption links rather than production links are the main source of indrect growth effects that these consumption links take the form of labour intensive goods and services produced locally and that the largest farm enterprises are most locally multiplicative of activities mopping up surplus rural labour this article has two purposes first the methodologies assumptions and data base for the quantification of the local and non local regional multiplier effects from agricultural development are examined second the contradictory interpretations for agricultural policy which have arisen from these exercises of quantification are discussed and an attempt made to explain their bases

of contracts and subcontracts small firms in vertically dis integrated production distribution systems in ldcs abstract the increasing complexity in production and distribution which accompanies development provides opportunities for small firms to participate by undertaking a limited range of activities in vertically dis integrated systems through subcontracting arrangements in addition to reducing costs in particular activities this facilitates the growth of production and distribution systems which are more complex than one integrated firm could manage or finance on its own for this pattern to work though contracting difficulties arising from market imperfections must be overcome alternative ways used by third world firms to solve these coordination problems are identified and policy implications suggested

trust interlinking transactions and credit in the industrial district an essential feature of the industrial district is trust among individuals and firms within it this paper focuses mainly on trust based on investments in building up a good reputation that is a personal capital that can even substitute for collateral in obtaining credit informal credit often linked to other transactions and especially subcontracting is therefore an important way of financing economic development in the industrial district moreover the importance of trust as personal capital gives rise to a double financial intermediation in the industrial district this double intermediation constitutes a device to reduce information problems that are usually responsible for credit rationing c 1994 academic press inc copyright 1994 by oxford university press

interaction between theory and observation in development this review covers the empirical research carried out over the past 30 years with respect to the process of development it examines the extent to which economic theories and generalizations derived from the experience of the developed countries are relevant to the developing countries the relationship between the strutural transformation that occurs in the process of development and economic growth is explored the neoclassical growth model is applied to both the more advanced countries whose economic transformation is near completion and to the developing countries still in the process of structural transformation further empirical work should reduce the controversy between neoclassical and structural approaches to development by making possible the formulation of computable models in which the distinction between developing and developed countries can be largely reduced to observable differences in certain statistical parameters initial conditions price and income elasticities and adjustment lags

trust in buyer supplier relations the case of the turkish automotive industry while the topic of interorganisational trust is gaining attention in academic literature research on developing countries remains sparse with the premise that certain contextual elements may be more relevant for developing countries we expand on existing models by testing the effect of initial support use of just in time delivery and informal commitment to predict the trust that turkish automotive suppliers have towards their buyers the results support the predictions that soft technologies and informal commitment increase trust

trade and industrial policy on an uneven playing field the case of the deciduous fruit canning industry in south africa the deciduous fruit canning industry dfci is a resource and labor intensive industry with a high trade ratio it offers the prospect of being a significant source of employment and export earnings for a number of southern hemisphere countries which enjoy a considerable comparative advantage market distortions severely constrain this outcome however most importantly a combination of protection and subsidies in the industrially advanced countries in addition as in other sectors globalization is increasingly associated with processes in which value added activities are located in the major markets of the industrialized countries this paper examines the dfci in south africa and explores the consequences of market distortions and the shifting location of profitable activities for both industrial and trade policy in that country

china and the trans pacific partnership a numerical simulation assessment of the effects involved the trans pacific partnership tpp is a new negotiation on cross border liberalisation of goods and service flows going beyond wto disciplines and focused on issues such as regulation and border controls this paper uses numerical simulation methods to assess the potential effects of a tpp agreement on china and also china s inclusion or exclusion on other countries we use a numerical 11 country global general equilibrium model with trade costs and inside money trade costs are calculated using a method based on gravity equations tpp barriers potentially removable are trade costs less tariffs simulation results reveal that china will be slightly hurt by tpp initiatives in welfare when china is out but the total production and export will be increased other non tpp countries will be mostly hurt in welfare but member countries will mostly gain if china takes part in tpp she will significantly gain and increase other tpp countries gain as well the comparison of tpp effects and global free trade effects show that the positive effects of global free trade are stronger than tpp effects japan s joining tpp would be beneficial to both herself and most of other tpp countries but which negative effects on china s welfare when out of tpp will increase further

industrial districts old wine in new bottles harrison b 1992 industrial districts old wine in new bottles reg studies 26 469 483 according to the theory of industrial districts a new wave of economic growth is being led in a number of regions in europe north america and east asia by spatially concentrated networks of mostly small and medium sized enterprises often using flexible production technology and characterized by extensive local interfirm linkages does this amount to a re emergence of the dominance of what urban and regional economists call agglomeration economies over the well known pressures on business to spatially disperse its operations neoclassical economic theorizing from marshall to perroux provides one perspective on the contemporary industrial district phenomenon another is afforded by granovetter s more recent elaboration of the ideas of embedding under and over socialization confronting each of these theoretical approaches with the other leads me to conclude that the industrial district prototypes involv

agglomeration advantages and capability building in industrial clusters the missing link accumulation of technological capability is crucial for industrial growth and competitiveness of firms particularly in the context of liberalisation and increasing international economic integration the article sheds new light on the forces driving capability building by complementing the micro economic perspective on learning with a meso economic perspective that takes account of interaction effects arising from firms embeddedness in regional networks the missing link at the interface between the two levels is explored by means of a taxonomy linking various agglomeration advantages to investments in technological effort the framework results in new policy relevant insights about the factors underpinning the acquisition of capabilities in comparison to conventional studies a case study about farm equipment manufacturing in pakistan s punjab province is used as an empirical illustration

the fuelwood market in greece an empirical approach abstract wood has been since ancient times the basic household heating medium nowadays wood remains the primary energy source in rural areas of developing countries mainly in africa in greece the domestic demand of fuelwood is relied mainly on the fuelwood domestic supply especially during the post war period the domestic supply satisfies adequately the domestic demand eliminating the role of imports the present study surveys the long run relationship between the fuelwood prices of different forest species in order to determine the role of the special market conditions in their price formation in addition the error correction model is estimated in order to survey the direction of the granger causality among the prices of the fuelwood forest species the implementation of the impulse response analysis and the variance decomposition confirmed that coniferous and beech fuelwood producer price may account for the volatility of the oak fuelwood producer price this result may contribute greatly to the conservation of oak forest an important carbon storage forest ecosystem

an inquiry into the development process of village industries the case of a knitwear cluster in northern vietnam abstract while village industries are known to have high potential to grow their growth process has seldom been analysed this study explores the development process of a rapidly growing village based garment cluster in northern vietnam we found that both the human capital and social capital measured by the kinship ties with overseas vietnamese traders of the proprietors facilitated their innovative entry into new export markets furthermore general human capital acquired by schooling and specific human capital acquired by management experience are found to have contributed to the adoption of a vertically integrated production system which in turn contributed to enhanced enterprise performance

the new institutional economics and its applicability to development abstract the several remarkable developments in the social sciences which have come to be known as the new institutional economics nie have not yet been fully exploited for analyzing the determinants and effects of institutional change in the context of development this paper identifies two important components of the nie and illustrates both a potential complementarities between them and b their applicability to various problems and policies in the long term development of developing countries

the role of foreign direct investment in the development of regional industrial systems current knowledge and suggestions for a future american research agenda o huallachain b 1985 the role of foreign direct investment in the development of regional industrial systems current knowledge and suggestions for a future american research agenda reg studies 20 151 162 the role of foreign direct investment in american regional industrial systems differs from the experiences found in other countries foreign investment in the us is increasing rapidly outside of the traditional industrial heartland it is highly integrated with the domestic economy and it does not seem to be developing the same truncated character found in other countries american research should concentrate on the impact increasing foreign investment is having on the technological makeup and total linkage structure of regional economies understanding these impacts will require a variety of research approaches ranging from sectoral studies to analysis of individual corporations this paper attempts to identify research priorities using the knowledge of foreign direct investment generated abroad

refuting two claims about virtual water trade abstract using the heckscher ohlin trade model i refute two prominent but incorrect claims on virtual water trade these claims are that virtual water trade i levels uneven water distribution and ii reduces the potential for water conflict both claims are based on an incorrect understanding of comparative advantage in the production of water intensive goods the results show that both claims only hold under certain conditions but do not necessarily follow from the heckscher ohlin trade model

path dependence in regional development persistence and change in three industrial clusters in santa catarina brazil abstract the concept of path dependence is useful to understand why economic actors who face a fundamental change in the overall incentive structure behave in a way that would appear irrational to the external observer industrial clusters in the southern brazilian state of santa catarina gave an impressive performance in the closed market of the past it was perfectly rational for individual firms to try to internalize as many activities as possible for various reasons thus emerged an extremely noncooperative business culture which does not change easily even under the new conditions of an opening market and increasing competitive pressure firms try to adjust to the new conditions based on their established practices yet the comparison between different clusters reveals that under certain conditions the behavior of firms can change profoundly toward cooperation and collective efficiency these conditions include an existential crisis the presence of change agents and the existence of organizations they can use and the existence of a role model that shows a possible alternative path for the adjustment process the most important changes are attempts to stimulate cooperation between firms and attempts to shape the supporting environment most changes occur inside the business community the political administrative system at the municipal and state levels is much more resistant to change

local input linkages a comparison of foreign owned and domestic manufacturers in georgia and south carolina barkley d l and mcnamara k t 1994 local input linkages a comparison of foreign owned and domestic manufacturers in georgia and south carolina reg studies 28 725 737 input purchasing patterns of foreign owned and domestic manufacturers were compared to determine if local economic impacts varied by country of ownership input purchasing data were obtained from a 1990 survey of south carolina and georgia manufacturers tobit estimation results indicate nonmetro foreign owned firms had significantly higher propensities to purchase inputs in county than domestic branch plants located in nonmetro counties no significant differences existed between the input purchase propensities of metro domestic and foreign owned manufacturers however foreign owned firms were disproportionately represented in industries with relatively weak indirect and induced effects on the local economies relatively strong overall impacts may not be associated with the relatively large initial input purchases of foreign owned

the rural non farm economy prospects for growth and poverty reduction summary policy makers have high expectations for the rural non farm economy rnfe given high income shares growing employment and frequently low capital requirements they see the rnfe as a potential pathway out of poverty for their rural poor yet available evidence suggests that pro poor rural non farm growth does not occur automatically for the poor to benefit from rural non farm growth policy makers must stimulate buoyant rural economies with robust non farm income growth not simply low productivity employment moreover the poor must gain access to growing market niches fluid labor markets provide one important bridge linking the rural poor to growing non farm opportunities

networks distance and trust telecommunications development and changing trading practices in ghana summary ghana liberalized its telecommunications sector in 1995 this article examines the impact of the phenomenal growth in access to cell phones on informal traders business practices the study demonstrates how these telecommunication pioneers have changed their mode of operation to reduce both transportation and transaction costs it is argued that traders with access to tools for more efficient communication over long distances provide better services and create a higher profit potential than others it is further argued that adoption of new technology enhances trust building in trade networks thus facilitating a higher number of transactions in an uncertain economic environment

agroindustrialization of the global agrifood economy bridging development economics and agribusiness research this paper examines the agroindustrialization process from two supposedly disparate views development economics and agribusiness research the evolution of conceptual and methodological approaches emanating from these fields is explored and general observations are made concerning farm economic interdependence institutional and organizational change differing scopes of interest the causes of agroindustrialization orientation and the choice of microanalytic tools terminology and unit of analysis despite an impressive list of hurdles disincentives and disconnects complementarities between the two fields are identified the paper concludes by exploring the potential of bridging development economics and agribusiness research to inform the future agroindustrialization research agenda

can industrial outwork enhance homeworkers capabilities evidence from clusters in south asia summary there has been an increasing informalization and feminization of the labor force in developing countries over the past few decades one aspect of these twin phenomena is the growth of subcontracted homework in manufacturing homework has a dual and contradictory character it can be the source of exploitation of workers but under some conditions it can foster human development and the emergence of microenterprises and promote local development this paper draws on surveys carried out in two low income south asian countries india and pakistan where homework is widespread it examines the social protection needs of these women workers and also argues for public action to promote such work as a possible new labor intensive growth strategy in developing countries

the triple c approach to local industrial policy abstract in both developed and developing countries there is mounting evidence that clustering and networking help small and medium sized manufacturers to raise their competitiveness the role of public policy in this process is less clear the european experience suggests that local and regional government can play an important role equally if not more interesting experiences can be found in developing countries their analysis constitutes the core of this paper the lessons can be summarized as the triple c which stands for customer oriented collective and cumulative

from tradition to modernity economic growth in a small world this paper introduces the small world model watts and strogatz nature 1998 into the theory of economic growth and investigates how increasing economic inte gration aects rm size and eciency norm enforcement and aggregate economic perfor mance when economic integration is low and local connectivity is high informal norms control entrepreneurial behavior and more integration mainly improves search for ecient investment opportunities at a higher level of economic integration neighborhood enforce ment deteriorates and formal institutions are needed to keep entrepreneurs in check a gradual take o to perpetual growth is explained by a feedback eect

innovation technical assistance and development the importance of technology users abstract in both industrialized and developing country situations technology users play a key role in generating successful new products and processes both high tech innovation such as the design of the boeing 747 aircraft and ibm computer software and innovative technologies for the rural poor such as vietnamese expeller pumps and bangladeshi hybrid rice strains owe much to the creativity and skill not of research scientist but of local housewives farmers and artisans new approaches to technical assistance which increase the interaction between r d institutions and these technology users are needed in order to tap this important innovation resource the incorporation of such an interactive research strategy into the work of the sudan energy research council led to highly successful initiatives in the fields of charcoal production improved charcoal stoves and agroforestry

learning adjustment and economic development transforming firms the state and associations in chile abstract this article views learning processes as key to successful economic adjustment it discusses results of research conducted in chile focused on the agroindustry and footwear sectors it identifies specific problems that large and small firms face to upgrade production and stresses the limits of focusing exclusively on market reforms for achieving growth the article discusses how institutions reshape to facilitate learning and improve performance in chile particularly the relations between firms the reorientation of trade associations and the state s role as facilitator of collective learning processes

trust social capital and economic development many argue that elements of a society s norms culture or social capital are central to understanding its development however these notions have been difficult to capture in economic models here we explore ap ossible role for trustworthiness as corresponding to social capital individuals are trustworthy when they perform in accordance with promises even if this does not maximize their payoffs the usual focus on incentive structures in motivating behaviour plays no role here instead we emphasize more deep seated modes of behaviour and consider trustworthy agents being socialized to act as they do to model this socialization we borrow from a process of preference evolution pioneered by bisin and verdier 2001 the model developed endogenously accounts for social capital and explores its role in the process of economic development it captures in a simple formal way the interaction between social capital and the economy s productive processes the results obtained caution against rapid reform and provide an explanation for why late developing countries may not easily be able to transplant the modes of production that have proved useful in the west

collective effects in italian and mexican footwear industrial clusters the focus of this article is on the analysis of the collective economic effects deriving from the intense set of backward forward labor horizontal and institutional linkages existing within clusters of enterprises among the economic effects two main categories are distinguished external economies which are the spontaneous by product of economic activities undertaken within the clusters and cooperation effects which are the results of explicit and deliberate cooperative behaviors of the economic actors

district level economic linkages in kenya evidence based on a small regional social accounting matrix abstract this paper explores the nature and extent of the economic linkages in a small regional economy defined by a market center and its hinterland in kenya the analysis is based on a set of income and employment multipliers derived from a social accounting matrix estimated for the region issues considered include the impact of production activities on regional value added and employment the influence of sectoral production on the level of household income and the impact of household expenditure on regional value added and the relative significance of production and consumption linkages in terms of stimulating aggregate income the above questions are examined under the assumption of complete excess capacity in regional production and under the assumption of supply constraints in agriculture the usefulness of the analysis for district level economic planning is demonstrated

globalisation of knowledge production and regional innovation policy supporting specialized hubs in the bangalore software industry abstract this paper is concerned with the changing role of regional innovation systems and regional policies in supporting the transition of indigenous firms in developing countries from competing on low costs towards becoming knowledge providers in global value chains special attention is paid to policies supporting the emergence and development of the regional innovation system in this transition process regional innovation systems in developing countries have very recently started to be conceptualised as specialized hubs in global innovation and production networks asheim b coenen l vang lauridsen j 2007 face to face buzz and knowledge bases socio spatial implications for learning innovation and innovation policy environment and planning c government and policy 25 5 655 670 chaminade c vang j 2006a innovation policy for small and medium size smes in asia an innovation systems perspective in yeung h ed handbook of research on asian business edward elgar cheltenham maggi c 2007 the salmon farming and processing cluster in southern chile in pietrobello c rabellotti r eds upgrading and governance in clusters and value chains in latin america harvard university press a specialized hub refers to a node in a global value chain that mainly undertakes one or a few of the activities required for the production and development of a given good or service or serves a particular segment of the global market in global value chains firms in developing countries have traditionally been responsible for the lowest added value activities however a few emerging regional innovation systems in developing countries are beginning to challenge this scenario by rapidly upgrading in the value chain there is however still only a poorly developed understanding of how the system of innovation emerges and evolves to support this transition process and what the role of regional innovation policy is in building the regional conditions that support indigenous small and medium size enterprises smes in this transition process this paper aims at reducing this omission by analyzing the co evolution of the strategies of indigenous smes and the regional innovation system of bangalore india

infrastructure and cluster development a case study of handloom weavers in rural ethiopia abstract clustering is an important structure of production in the rural nonfarm sector based on a primary survey of rural handloom clusters in ethiopia this article examines the mechanism and performance of clustering given weak financial institutions clustered producers and traders use trade credits to ease working capital constraints moreover geographical clustering enables entrepreneurs with limited capital to enter the business through shared workspaces and fine division of labour an improvement in infrastructure can further enhance firm performance in a cluster in towns with electricity access producers work longer hours by sharing lit workspaces at lower rental cost

virtual incubation in industrial clusters a case study in pakistan abstract in industrial clusters transaction costs are kept low and free riding is discouraged by a community mechanism developed through dense and repeated interactions among entrepreneurs in such environments new entrants without established reputations and connections are put at a distinct disadvantage this negative effect on new entry must be neutralised for an industrial cluster to expand using enterprise level data from pakistan this study finds that personal networks are indeed important for successful enterprise operation which works to the advantage of incumbents but that subcontracting plays the role of virtual incubation in nurturing new enterprises reinforcing the cluster s dynamism

the rural non farm sector issues and evidence from developing countries abstract the rural non farm sector has traditionally been viewed as a low productivity sector which produces low quality goods it is often expected to wither away as a country develops recent years have seen a shift away from this position towards recognition that the rural non farm sector can and often does contribute to economic growth rural employment poverty reduction and a more spatially balanced population distribution this paper reviews the literature on the conceptual and empirical underpinnings of this more recent perspective focussing on the experience in developing countries the paper documents the size and heterogeneity of the sector pointing to evidence that in many countries the sector is expanding rather than declining the issues associated with measuring the sector s economic contribution are discussed followed by empirical assessments for several countries and regions the distributional impact of non farm earnings is examined and it is found that a pro poor impact while by no means inevitable can be considerable the sector s trajectory over time in different settings is reviewed and the scope for and experience of various policy interventions is discussed

collective efficiency growth path for small scale industry this study is concerned with the growth of small local industry in developing countries and explores one particular route for understanding and fostering such growth it focuses on the clustering of firms and the competitive advantage which they derive from local external economies and joint action captured in the concept of collective efficiency following a conceptual discussion the article explores the economic and institutional conditions which enhance or hinder collective efficiency this includes a case study which suggests that responding to opportunity and crisis requires shifting from mere reliance on external economies to joint action and from ascribed to earned trust

growth and barriers to growth among nairobi s small and medium sized garment producers abstract few of nairobi s small and medium sized garment enterprises actually grow understanding why this should be so requires recognition both of their common problems and of the variations in their organization and market relations two factors appear critical for the growth of all of the producers demand for new clothing and the firm s initial capital other growth constraints differ according to the type of firm space constraints are highlighted as especially important for businesses presently operating in market stalls the design of policy and donor interventions needs to consider both the commonalities and the differences among firms

rural urban effects of terminating farm subsidies a rural urban interregional computable general equilibrium cge model is constructed to simulate the effects of terminating farm subsidies on household incomes employment rates farm and non farm sectoral activity regional costs of living and other economic indicators the magnitudes of the effects depend on regional factor and goods market segmentation robust short run implications are that ceasing farm subsidies would cause rural nonfarm particularly household service sector employment to fall and lead to lower household income on the other hand rural manufacturing activity expands and the cost of living falls relative to urban urban employment household income and land rents rise although termination of farm subsidies causes a decline in rural real product the urban real product gain outweighs rural losses

industrial clusters knowledge integration and performance abstract scholars examining the phenomenon of industrial clusters have begun to regard them as social communities specializing in efficient knowledge creation and transfer in addition to neo classical arguments focusing on the advantages of localization we seek to contribute to this body of work by developing the argument that both the degree of knowledge integration between an industrial cluster s agents and the scope of their economic activities are key dimensions behind their economic performance we present a model that incorporates a hypothesized relationship between these three dimensions and argue that a formal test of this hypothesis constitutes a promising area of future empirical research in this field

trust and inter firm relations in developing and transition economies the role of trust in facilitating economic growth has been highlighted in previous contributions to this journal in order to take this debate forward this article argues 1 that more attention needs to be given to the relationship between sanctions and trust and 2 that it is worth distinguishing between the minimal trust for making markets effective and the extended trust required for deeper kinds of inter firm co operation to work the article goes on to ask why minimal trust is lacking and so hard to construct in the republics of the former soviet union it then examines how extended trust grows or can be made to grow in industrial supply chains and clusters in developing countries

the dynamics of micro and small enterprises in developing countries abstract the number of people engaged in micro and small enterprises increases as a result of new enterprises being started and through an expansion of existing activities as a partial offset to these increases employment declines when existing businesses cease operations this article draws on recent survey work to examine the magnitude and determinants of enterprise births closures and expansions it explores the ways in which these different sources of change are influenced by the state of the macroeconomy and examines policy and project implications

selective spatial closure and local economic development what do we learn from the argentine local currency systems summary this paper discusses local currency systems as an instrument of selective spatial closure to mitigate impacts of externally induced changes and to promote endogenous local economic development drawing on data collected in argentina it was found that local currency systems provided relatively protected economic spaces thus enabling poor households and especially women to launch micro enterprises and diversify income sources they also supported existing enterprises by offering an emergency market outlet and when combined with other measures by building local trading and production networks following recent theory on local economic development the argentine case represents an example of local economic regeneration

the impact of corruption on firm tax compliance in transition economies whom do you trust tax compliance is an important issue for gov ernments and the public alike to meet public needs and fund public mandates firms around the world are expected to comply with tax laws factors that are related to orga nizational firm tax compliance have not been sufficiently examined in the literature owing to the increasing global influence of transition economies factors associated with firm tax compliance in transition economies are particu larly of interest based on a sample of over 5 000 firms from 22 former soviet bloc transition economies we find that higher levels of corruption and higher levels of par ticularized trust reliance on friends and family are asso ciated with lower levels of tax compliance interestingly we also find that the negative relationship between cor ruption and tax compliance is weakened in situations of higher generalized trust trust in strangers overall our study s results suggest that institutional factors play an important role and are related to firm tax compliance behavior in transition economies

how to promote clusters policy experiences from latin america abstract in this paper we propose to differentiate between three types of clusters when it comes to formulating cluster oriented policies in latin america survival clusters of micro and small scale enterprises owe their existence more to unfavorable macroeconomic conditions and less to entrepreneurial competence and dynamism their competitive potential is limited support measures should mainly aim at improving the conditions for survival since these clusters are important in creating employment opportunities the impetus should be to break through the low skills low investment vicious circle more advanced and differentiated mass producers have been flourishing in the import substitution era but are coming under enormous pressure with the transition to open economies in these clusters the main challenge is to create an environment that stimulates and supports learning innovation and constant upgrading clusters of transnational corporations are typically dominated by foreign firms not only at the final assembly stage but also in parts production these clusters often are showcases of best practice manufacturing this can be used to stimulate the upgrading of domestic firms notably by involving them in the supply chain of transnationals

the role of large producers in industrial districts a case study of high technology systems houses in southern california scott a j 1992 the role of large producers in industrial districts a case study of high technology systems houses in southern california reg studies 26 265 275 a generalized concept of industrial districts is proposed the concept hinges on the intertwined notions of the social division of labour external economies and locational agglomeration it is argued that large production units often play an important part in sustaining the growth and development of industrial districts and that such districts need not be composed solely of small production units the argument is illustrated by means of a case study of the role of large systems houses within the high technology industrial districts of southern california it is concluded that neither large establishments nor the internationalization of the economy necessarily threaten the continued viability of industrial districts it is also suggested that industrial districts represent a very widely developed phenomenon in time and space scott a j

behind the market stage where real societies exist part i the role of public and private order institutions this two part article is an attempt to clarify the social conditions upon which the viability and efficiency of the market system rest it strives to show that the embeddedness thesis that is an explanation based upon the existence of long run personal ties involving the use of reputation mechanisms among transactors cannot fully elucidate the question as to how the problem of trust is solved in market societies as explained in part i there are difficulties of both theoretical and empirical historical kinds and these explain why the market order needs to be sustained by private and public order institutions in part ii the role of generalised morality in backing or supplementing such institutions is discussed in the light of game theory and particular emphasis is put on the ability of moral norms to sustain honest behaviour by generating the right kind of preferences and establishing trust the vexed problem of the dynamics of norm emergence and erosion is then addressed with a view to showing

formation of foreign direct investment clustering a new path to local economic development the case of qingdao jun yeup kim and le yin zhang formation of foreign direct investment clustering a new path to local economic development the case of qingdao regional studies this paper investigates the clustering of chinese electronics manufacturers large and small alongside established foreign producers in qingdao north china it examines how the supplier buyer linkages between foreign invested enterprises fies and local firms have driven the development of a successful electronic industry cluster around development zones established by the local authority underpinning the success of the large domestic firms both at home and abroad it also analyses how fies collaboration with local firms fosters local economic development in qingdao by integrating the theoretical perspectives of the hub and spoke model from economic geography and flagship and five partner s model in the science of strategic management it develops its own theoretical lens to investigate the inter firm network between the fies and local fir

virtual carbon and water flows embodied in international trade a review on consumption based analysis in the globalised world greenhouse gas ghg emissions and water consumption are becoming increasingly important indicators for policy and decision making development of footprint assessment techniques over the last decade has provided a set of tools for monitoring co2 emissions and water flows in the world an overview of the virtual co2 emissions and virtual water flow trends in the international trade based on consumption perspective is performed in the current work the review of the recent literature indicates that 1 producers and consumers are located at various places in different parts of the world and consequently they are significant differences in virtual ghg greenhouse gases emissions 2 the us and the eu have high absolute net co2 imports 3 china and some other fast developing countries as india brazil and others are exporting countries and increasingly carry the load of exports of virtual ghg including co2 emissions and virtual water that are triggered due to consumption of the related goods in the importing countries 4 by importing products produced with lower carbon emission intensity and less water consumption than in the domestic industry international trade can reduce global environmental pressure results from analysis indicate that future actions should be focused onto two main areas i to steer regions towards self sufficiency based on more efficient processes and by combining production of surrounding countries ii to develop a mechanism with shared market of virtual carbon and virtual water between trading partners regionally and internationally

technique and system the spread of japanese management techniques to developing countries in this paper a distinction is drawn between the isolated use of individual japanese management techniques and their adoption in an integrated package as part of a production system although the use of individual techniques does confer significant benefits to innovating firms it is clear from international experience that the major gains arise from systemic application the central objective of this paper is to explore whether there are obstacles specific to less developed countries ldcs in the systemic application of japanese management techniques the major forces driving the adoption of these new management techniques are reviewed based upon research in latin america india and zimbabwe then three major ldc specific factors affecting systemic adoption are considered human resources interfirm cooperation and management

revisiting marshall s agglomeration economies technological relatedness and the evolution of the sheffield metals cluster potter a and watts h d revisiting marshall s agglomeration economies technological relatedness and the evolution of the sheffield metals cluster regional studies according to alfred marshall firms receive increasing returns from a trinity of agglomeration economies a local pool of skilled labour local supplier linkages and local knowledge spillovers this article re examines the mechanisms underlying marshall s agglomeration economies in the sheffield metals cluster wherein marshall discovered them despite the cluster s decline empirical evidence is found that the mechanisms underlying marshallian agglomeration economies continue to occur within the surviving metals industry however upon closer examination marshallian agglomeration economies have evolved to become more prevalent amongst plants that use related metals technology the results highlight the importance of technological relatedness to cluster survival

competition cooperation and the neighboring farmer effect abstract in this paper we propose a model that explains how cooperation can emerge spontaneously between firms in a highly competitive market environment the basic idea is that the more competitive is the market the less costly it is for firms to help each other like good neighbors cooperation takes the form of sharing technical know how which speeds up the adoption of new technologies normally developed elsewhere that spur industrial development the model comports with the development history of japan s first example of successful industrial development its cotton spinning industry whose conditions match those of firms in small open economies today

economic and social upgrading in global value chains and industrial clusters why governance matters the burgeoning literature on global value chains gvcs has recast our understanding of how industrial clusters are shaped by their ties to the international economy but within this context the role played by corporate social responsibility csr continues to evolve new research in the past decade allows us to better understand how csr is linked to industrial clusters and gvcs with geographic production and trade patterns in many industries becoming concentrated in the global south lead firms in gvcs have been under growing pressure to link economic and social upgrading in more integrated forms of csr this is leading to a confluence of private governance corporate codes of conduct and monitoring social governance civil society pressure on business from labor organizations and non governmental organizations and public governance government policies to support gains by labor groups and environmental activists this new form of synergistic governance is illustrated with evidence from recent studies of gvcs and industrial clusters as well as advances in theorizing about new patterns of governance in gvcs and clusters

incorporating finance into a modified subsector framework the fertilizer subsector in the gambia abstract the subsector analytical framework as currently employed is usually limited to examining a subsector in a single market product or input the framework often excludes an explicit analysis of financial markets due to the assumptions that they function in a competitive environment or are considered less important than other features of the subsector these assumptions are inappropriate in most developing countries where financial markets are imperfect and access to financial services is rationed this paper proposes a modified subsector framework that incorporates the financial markets affecting a given subsector to more fully explain operational efficiency and market technology the framework is used to study the fertilizer subsector in the gambia

farm nonfarm linkages in rural sub saharan africa this paper is an accumulation over the past 25 years of a body of detailed work examining the structure of africa s rural nonfarm economy first it systematically reviews empirical evidence on the nature and magnitude of the african rural nonfarm economy it then explores differences across locality and size across countries and over time in an effort to assess likely patterns of growth a subsequent review of key production and consumption parameters allows an estimate of the magnitude of the agricultural growth multipliers in africa the paper concludes with a brief discussion of policies and programs that will be necessary if farm nonfarm growth linkages are to achieve their full potential

rural nonagricultural activities in development theory and application abstract this paper focusses on the potentially important role of rural nonagricultural activity in the development process using the hymer resnick z goods model as a point of departure we first show that its pessimistic conclusions are based on rather restrictive assumptions as applied to the colonial period we relax these assumptions indicating the theoretical possibility of a substantially more positive scenario for that period subsequently we analyze the role of z goods traditional and nontraditional in the post independence era again distinguishing between archetypal pessimistic and optimistic cases finally the comparative historical experience of the philippines and taiwan is brought to bear to illustrate the argument empirically

are virtual water flows in spanish grain trade consistent with relative water scarcity abstract virtual water adds a new dimension to international trade and brings along a new perspective about water scarcity and water resource management most virtual water literature has focused on quantifying virtual water flows and on its application to ensure water and food security nevertheless the analysis of the potential gains from international trade at least from a water resources perspective needs to take into account both spatial and temporal variations of blue groundwater and stream flow and green soil moisture water as well as the socioeconomic and policy conditions this paper evaluates whether spanish international trade with grains is consistent with relative water scarcity for this purpose the study estimates the volume and economic value of virtual water flow through international grain trade for the period 1997 2005 which includes 3 years with different rainfall levels the calculations show that spain is a net virtual water importer through international grain trade the volume of net virtual water imports amounts to 3420 4383 and 8415 million m 3 in wet 1997 medium 1999 and dry 2005 years respectively valuing blue water at its shadow price or scarcity value blue water exports oscillate between 0 7 and 34 2 million euros for a wet and dry year respectively overall grain trade is apparently consistent with relative water scarcity as net imports increase in dry years however the evolution of grain exports expressed as a variation in quantity and volume does not match the variations in resource scarcity a disaggregated crop analysis reveals that there are other factors such as quality product specialization or the demand for a standardized product which also influence trade decisions and are not included in the notion of virtual water these facts among others can therefore create potential distortions in the application of virtual water to the analysis of specific trade patterns nevertheless from a water resources perspective virtual water can bring important insights across countries for improving water and land management globally fostering adaptation strategies to climate change and to transboundary resource management

growth constraints on small scale manufacturing in developing countries a critical review abstract the question raised in this review is whether small scale producers in developing countries can expand or whether they are up against constraints which stunt their growth most of the literature has been optimistic on this score while internal constraints e g lack of managerial ability or external constraints e g discrimination from government are identified expansion is seen as an open ended process in other contributions this view has been severely criticized some allege that the small producers are exploited through various mechanisms others suggest that their road to expansion is blocked as a result of factors such as the pre existence of very advanced technology the control of large firms over product markets or difficulties in access to raw materials in discussing the arguments put forward in the debate an attempt is made to assess their theoretical bases and examine the extent to which they are supported empirically while most studies express explicitly or implicitly a definite view on the growth potential of small producers such judgement is rarely based on a comprehensive examination of the context which determines this potential

how significant are externalities for development if one man starts a new idea it is taken up by others and combined with suggestions of their own and thus it becomes the source of further new ideas and presently subsidiary trades grow up in the neighbourhood supplying it with implements and materials marshall 1920 p 225

local development conceptual bases and policy implications coffey w j and polese m 1985 local development conceptual bases and policy implications reg studies 19 85 93 although local development is frequently cited as an option within the broader context of regional policy the concept remains vague the bases of the local development approach lie in its complementarity with three traditional pillars of regional theory and policy capital and infrastructure policies migration as an adjustment mechanism and growth centre strategies in examining the potential utility of local development as an effective element of regional development policy we emphasize the emergence of local entrepreneurship and the role of the state in stimulating local initiatives local development policy may be generalized in terms of three options involving financial assistance access to information and social animation

sourcing patterns of foreign owned multinational subsidiaries in europe tavares a t and young s 2006 sourcing patterns of foreign owned multinational subsidiaries in europe regional studies 40 583 599 this paper investigates the determinants of the international sourcing propensities of foreign owned multinational mne subsidiaries in four european union host countries major findings concern the impact of subsidiary roles and economic integration on international sourcing patterns regional and global integration are leading to a greater import orientation among mne subsidiaries including product mandate firms that are assumed to be strongly embedded within host economies the results cast doubts on existing criteria for inward foreign direct investment fdi attraction policy implications are developed relating to the attraction of inward fdi and to corporate development policies tavares a t et young s 2006 la distribution des sources d approvisionnement des filiales multinationales a capital etranger en europe regional studies 40 583 599 cet article che

african enterprise clusters and industrialization theory and reality abstract using six case studies from africa this paper examines the theoretical argument that geographic and sectoral clustering enables enterprises to overcome constraints to growth and development findings were both theoretical and practical theoretically the study underscored the strength of the collective efficiency framework but found that certain anomalies could only be explained by other contextual variables grouping the six case studies revealed important differences among them and showed that each group plays its own part in the industrialization process groundwork clusters prepare the way industrializing clusters begin the process of specialization differentiation and technological development and complex industrial clusters produce competitively for wider markets the paper concludes with practical implications for african governments donors and the business community

china and trans pacific partnership agreement countries estimation of the virtual water trade of agricultural products abstract the trans pacific partnership agreement tppa is one of the most important multilateral free trade and investment agreements in recent years although as a major economic power in the asia pacific region china has yet to join the tppa existing research on china and tppa countries has mainly been conducted from political and economic perspectives this paper first reports the relationship between china and tppa countries from the perspective of virtual water trade of agricultural products and completes a diachronic analysis from 2001 to 2014 the results indicate that china was in virtual water trade surplus with tppa countries for agricultural products and that the surplus had an expansion trend the exported virtual water totalled 7 47 billion m 3 y whereas 63 45 billion m 3 y was embedded in imported products malaysia was the biggest virtual water surplus partner of china and japan was the biggest virtual water deficit partner additionally the proportion of the grey water footprint of agricultural products that china exported to tppa countries was about five times higher than that imported from tppa countries it reflected the difference of agricultural science and technology moreover the products structure of china s virtual water trade was not reasonable and was excessively focused on several products finally with respect to environmental and water allocation ethics tppa countries were classified into four types in terms of net import and water abundance mutual benefit countries australia canada new zealand the united states malaysia and chile unilateral benefit countries peru and brunei supported countries japan and singapore and double pressure countries mexico and vietnam with respect to the virtual water trade of agricultural products there is a close relationship between china and tppa countries the virtual water trade promotes the sustainability of water resources and the findings are conducive to the adjustment of trade structure to achieve optimal state of ecology economy and politics

firm level knowledge accumulation and regional dynamics two bodies of literature have contributed significantly to our insight into the forces driving competitiveness and economic growth regional agglomeration studies emphasise the favourable impact of geographical proximity on regional economic performance particularly through knowledge spillovers however the firms that constitute those agglomerations largely remain black boxes in contrast studies dealing with technological learning explain economic performance at firm level without systematically taking account of the effects of geographical proximity the aim of the paper is to propose a possible way to bridge this gap this contributes to our understanding of the determinants of economic growth in industrial clusters an empirical illustration of a capital goods cluster is elaborated

the transition to flexible specialisation in the us film industry external economice the division of labour and the crossing of industrial divides there is increasing evidence that mass production methods are losing their dominance in the advanced industrial economies and that various forms of flexible production organization are on the rise the transition from mass production organization to flexible specialization is analyzed in detail through a case study of the film industry where it is shown that a system of production once based on product standardization high levels of vertical integration and stable oligopolistic market structures has after a period of vertical disintegration given way to a production system based on a deep division of labor between firms and high levels of flexibility in both product design and output levels the transition may be the result of increasing external economies of scale stemming from the development of the industry s social division of labor copyright 1989 by oxford university press

what ever happened to poverty alleviation abstract the failure of many programs directed toward alleviating poverty is better understood than the successes this paper identifies the traits that characterize several better performing programs funded by the ford foundation traits that are not commonly found in such programs all focused narrowly on a particular trade or activity in the beginning used credit as an entry point started by brokering loans rather than lending directly and had leadership linked to powerful institutions participants were already engaged in the economic activities supported by the programs marketing channels existed and powerful consumer groups were often in favor of production by beneficiary groups though these findings seem obvious few programs funded by donors display these characteristics suggesting that donors choose programs and organizations more carefully and not limit their funding to the nongovernmental sector

small firms and their helpers lessons on demand abstract small enterprise se programs are currently the rage because of their potential to create employment they are typically supply driven providing standardized training technical assistance credit but most cases of se based growth have involved demand driven support provided by large customers firms traders government agencies state enterprises this article argues that such inherently customized support constitutes a better way to deliver services to ses and is more likely to stimulate sustained se growth with respect to se favoring procurement by government in particular we show that this can be done without running up against the problems of similar attempts in the past and in a way that also reduces the costs of running government we draw for illustration from a successful case of se favoring procurement in the brazilian state of ceara

networks trust and innovation in tanzania s manufacturing sector abstract the social dimensions of innovation are examined for a group of manufacturers in mwanza tanzania social networks of businesspeople in mwanza are found to support innovation in manufacturing firms trust in these relations is especially important as it improves the quality of information exchanges and encourages the development of strong intracommunity ties and weak intercommunity relations a typology of manufacturers demonstrates how different social strategies relate to innovation the findings suggest that openness to social relations enhances innovation but that weak formal institutions discourage manufacturers from extending their social relations beyond core networks

the effect of globalisation on water consumption a case study of the spanish virtual water trade 1849 1935 abstract this paper aims to analyse the impact on water consumption of trade expansion in the first era of globalisation to that end we have chosen the case of spain a semi arid country with significant cyclical water shortages more specifically we are interested in answering the following questions what volume of water was required for exports of agricultural and food products how did this variable evolve over time which factors drove this evolution in short we wish to understand the impact on water resources of spain s entry into world agriculture and food markets firstly we examine virtual water trade flows in the long run secondly we attempt to disentangle certain major driving forces underlying these trajectories in order to establish the role played by trade in the final net balance of water a decomposition analysis da is applied our findings show the great pressures that the first globalisation imposed on not only domestic but also foreign water resources trade volumes as well as trade patterns were essential factors driving rising virtual water flows while yield improvements contributed smoothly to moderation in the expansion of water flows

global foreign direct investment flows the role of governance infrastructure abstract it is widely argued that a country s economic performance over time is determined to a great extent by its political institutional and legal environment we refer to these institutions and policies as the governance infrastructure of a country we utilize newly developed indices to examine the effects of governance infrastructure on both foreign direct investment fdi inflows and outflows for a broad sample of developed and developing countries over 1995 97 in addition we examine the role of other forms of infrastructure including human capital and the environment the results clearly indicate that governance infrastructure is an important determinant of both fdi inflows and outflows investments in governance infrastructure not only attract capital but also create the conditions under which domestic multinational corporations emerge and invest abroad it would appear that investments in governance infrastructure are subject to diminishing returns so that the benefits in terms of inflows are most pronounced for smaller and developing economies

from ascribed to earned trust in exporting clusters abstract this paper is concerned with the role of trust in export manufacturing it asks how trust has developed in two industrial clusters which are located in developing countries and export most of their output to north america and europe the main conclusion is that trust was based initially on socio cultural ties between clustered firms and later on conscious investments in inter firm relationships