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Infrastructure and Cluster Development: A Case Study of Handloom Weavers in Rural Ethiopia

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  • Xiaobo Zhang
  • Lisa Moorman
  • Gezahegn Ayele

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.

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  • Xiaobo Zhang & Lisa Moorman & Gezahegn Ayele, 2011. "Infrastructure and Cluster Development: A Case Study of Handloom Weavers in Rural Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 47(12), pages 1869-1886.
    • Handle: RePEc:taf:jdevst:v:47:y:2011:i:12:p:1869-1886
    DOI: 10.1080/00220388.2011.579112
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    Cited by:

    1. Dai, Ruochen & Mookherjee, Dilip & Quan, Yingyue & Zhang, Xiaobo, 2021. "Industrial clusters, networks and resilience to the Covid-19 shock in China," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 433-455.
    2. Babur Wasim Arif & Tetsushi Sonobe, 2012. "Virtual Incubation in Industrial Clusters: A Case Study in Pakistan," Journal of Development Studies, Taylor & Francis Journals, vol. 48(3), pages 377-392, March.
    3. Merima Ali & Jack Peerlings & Xiaobo Zhang, 2014. "Clustering as an organizational response to capital market inefficiency: evidence from microenterprises in Ethiopia," Small Business Economics, Springer, vol. 43(3), pages 697-709, October.
    4. Minten, Bart & Assefa, Thomas Woldu & Abebe, Girum & Engida, Ermias & Tamru, Seneshaw, 2016. "Food processing, transformation, and job creation: The case of Ethiopia’s enjera markets," ESSP working papers 96, International Food Policy Research Institute (IFPRI).
    5. Masaki Nakabayashi, 2017. "Honesty, Diligence and Skill: Risk Sharing and Specialization in the Kiryu Silk Weaving Cluster, Japan," Review of Development Economics, Wiley Blackwell, vol. 21(4), pages 1401-1424, November.

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