Ethnic communities: a factor of industrial clustering

Abstract

Purpose This paper not only draws conclusions from the available literature but also offers some new factors as well, which are not included in the existing literature. To be more precise, the purpose of this paper is to ascertain factors behind the clustering of the motorcycle industry, a low-tech and low investment industry. This paper weighs the government’s policies, role of factors of production, infrastructure, geography and other drivers for the subject industry and associated industries in the geographic location of Hyderabad. Design/methodology/approach For collection of data, a questionnaire was designed to survey the cluster (n=250) after reviewing the literature and conducting interviews of experts of the motorcycle manufacturing industry, i.e. owners, managers, auditors, suppliers, etc.; a component matrix was developed to reduce the dimension of factors and measure the correlation, which helped to weigh the influence of factors. A confirmatory factor analysis proposed four factors as the best fit. Findings The study conjectured a new viable factor for industrial clustering: “ethnic community,” as it acts as a catalyst to diffuse knowledge, experience and skills within the industrial cluster. Research limitations/implications This research does not find the weightage of the factors for industrial clustering, i.e. it does not calculate the influence of factors behind the industrial clustering. Practical implications The above findings aim to stimulate policy makers and researchers alike to further pursue the line of inquiry developed in this paper. Originality/value A first-time confirmatory factor analysis is used to find the reasons of industrial clustering. Root mean square error of approximation is used to test the model fit. Most importantly, it is the research about an emerging industrial cluster.

Industrial clusters in the developing economies: Insights from the Iranian carpet industry

“…This suggests that the successful development and implementation of regional development strategies demands careful consideration of several local‐specific conditions (Porter, ). In line with the above discussion, Kamran et al () investigated the industrial clusters in Pakistan and claimed that for a high growth trajectory, the domestic investment environment, political instability, and regulations must be improved. Specifically, the authors analyzed the role of classical factors of production (including land, labor and capital), and found that a better infrastructure, availability of utility services, and the accessibility to inexpensive bank loans and commercial finance (Dumon, ) helped businesses in the developing economies to flourish in geographic proximities (Ahmed & Jhandir, ).…”

“…Considering these complex challenges, it seems that, despite excessive interest by the developing countries to apply industrial clusters, the effectiveness of the clustering concept remains questionable (Tan, 2006). For the micro-level challenges, the effect of context attributes to implement a cluster was revealed, which highlighted the role of the domestic environment as a success factor industrial cluster (Kamran et al, 2017). Our analysis unpacks how the contextual factors, such as poverty level, investment charming, people attitude, and labor and financial situations can adversely affect the cluster performance.…”

“…In this respect, Ghauri, Lutz, and Tesfom (2003) observed that clusters could be useful in solving export-marketing problems for manufacturing firms in developing countries, where the authors discussed conditions under which learning and capabilities exploitation can occur in Brazilian clusters. However, many of these studies have focused on the supportive role of government and public agencies on clusters performance (e.g., Kamran et al, 2017;Richardson, 2013), indicating that when the social bonding in a given cluster is weak, government interventions are of greater significance. Another stream of literature has investigated other aspects of clustering in developing countries, including trust and inter-firm relationships (e.g., Chen et al, 2017;Sarach, 2015;Vanzettine et al, 2017), value creation and competitive advantage (e.g., Lei & Huang, 2014), knowledge systems and innovation (e.g., Hashino & Otsuka, 2013;Richardson, 2013), and social capital and responsibility (e.g., Kamath, 2013;Lund-Thomsen & Pillay, 2012).…”

Emergence and development of low-tech clusters: an empirical study of five Palestinian clusters

“…Many studies of clusters in developing countries have focused on the supportive role of government and public agencies on clusters’ performance (Richardson, 2013; Kamran et al , 2017), indicating for example that when the social bonding in a given cluster is weak, government interventions are of greater significance. The role of classical factors of production (including land, labour and capital) is analysed by Kamran et al (2017) and subsequently found that better infrastructure, availability of utility services and the accessibility to inexpensive bank loans and commercial finance helped businesses in developing countries flourish in geographic proximities. Richardson (2013) mentions that it would be great if the policymakers foresee the problems prior to developing the cluster and can take the necessary steps to address them.…”

“…The review of the cluster literature reflects, although a host of studies have examined clusters in developed countries (Kamran et al , 2017; Vanzettine et al , 2017), that a lack of research that systematically addresses the dynamics and nature of cluster development in developing economies is still problematic, especially small and medium-sized enterprises (SMEs) (Van Dijk and Rabellotti, 1997; Schmitz and Nadvi, 1999; Park and Luo, 2001; Lin et al , 2009; Pyke and Lund-Thomsen, 2016; Vanzettine et al , 2017). Researchers have identified this research gap, subsequently calling for more research to investigate the transferability of current theories of clusters to developing countries (Ghauri and Santangelo, 2012; Vanzettine et al , 2017).…”