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The cutting Edge: Collective efficiency and international competitiveness in Pakistan

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  • Khalid Nadvi
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    Abstract

    Clustering can provide important benefits for small- and medium-sized enterprises in the developing world. Yet gaps remain in our understanding of how such clusters organize, function and compete. This paper draws on case material from a Pakistani cluster, a global player in the world market for surgical instruments, to argue that cheap labour is an insufficient explanation for international success. Instead, it argues that collective efficiency gams of clustering namely passively acquired external economies and actively generated joint action benefits, are central to competitiveness. The paper shows that while all firms in the cluster gain from agglomeration economies, the extent of inter-firm co-operation, and the benefits arising from it, are highly differentiated. It concludes that external economies, while necessary, are not sufficient to bring about growth. For growth, joint action, particularly in strategic vertical ties with local subcontractors and external buyers, is critical.

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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal Oxford Development Studies.

    Volume (Year): 27 (1999)
    Issue (Month): 1 ()
    Pages: 81-107

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    Handle: RePEc:taf:oxdevs:v:27:y:1999:i:1:p:81-107

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    Cited by:
    1. Overman, Henry G. & Venables, Anthnony J., 2010. "Evolving City Systems," Working Paper Series, World Institute for Development Economic Research (UNU-WIDER) UNU-WIDER Working Paper W, World Institute for Development Economic Research (UNU-WIDER).
    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. Caniels, M. & Romijn, H., 2001. "Firm-level knowledge accumulation and regional dynamics," Eindhoven Center for Innovation Studies (ECIS) working paper series, Eindhoven Center for Innovation Studies (ECIS) 02.02, Eindhoven Center for Innovation Studies (ECIS).
    4. Henry Overman & Anthony J. Venables, 2005. "Cities in the Developing World," CEP Discussion Papers dp0695, Centre for Economic Performance, LSE.
    5. Padilla Bernal Luz Evelia & Reyes Rivas Eliver & Pérez Veyna Oscar, 2012. "Evaluación de un cluster bajo agricultura protegida en México," Contaduría y Administración:Revista Internacional, Accounting and Management: International Journal, vol. 57(3), pages 219-237, julio-sep.
    6. Coslovsky, Salo V., 2014. "Economic Development without Pre-Requisites: How Bolivian Producers Met Strict Food Safety Standards and Dominated the Global Brazil-Nut Market," World Development, Elsevier, vol. 54(C), pages 32-45.
    7. Nadvi, Khalid, 1999. "Collective Efficiency and Collective Failure: The Response of the Sialkot Surgical Instrument Cluster to Global Quality Pressures," World Development, Elsevier, vol. 27(9), pages 1605-1626, September.
    8. Saon Ray & Nisha Taneja & Neetika Kaushal, 2011. "Opening India’s Garments Sector to South Asia," Working Papers id:4461, eSocialSciences.
    9. Thomas Brenner & André Mühlig, 2007. "Factors and Mechanisms Causing the Emergence of Local Industrial Clusters - A Meta-Study of 159 Cases," Papers on Economics and Evolution 2007-23, Philipps University Marburg, Department of Geography.
    10. Ruan, Jianqing & Zhang, Xiaobo, 2010. "“Made in China”: Crisis begets quality upgrade," IFPRI discussion papers 1025, International Food Policy Research Institute (IFPRI).

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