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Organizing the Indonesian clothing industry in the global economy: the role of business networks

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  • Peter Dicken
  • Markus Hassler

Abstract

In a relatively short period of time, Indonesia has become a significant centre of clothing production within the global economy. Its overall growth can be explained primarily by the intersection between two sets of political-economic processes: those operating at the global level of the industry in general and those specific to Indonesia itself. Within these general processes, we explore the particular organizational mechanisms through which this growth has occurred. Detailed field evidence shows how the Indonesian clothing industry is deeply embedded in production networks which connect domestic producers with international networks of production and distribution, notably those organized by Korean, Taiwanese, US, and European firms. Although such networks are generally consistent with Gereffi's concept of the buyer-driven global commodity chain, we show that the precise shape and the driver of the company-specific production networks in Indonesia are highly dependent on the specific market being served. Finally, brief attention is given to the potential impact of the current East Asian economic crisis on Indonesian clothing firms.

Suggested Citation

  • Peter Dicken & Markus Hassler, 2000. "Organizing the Indonesian clothing industry in the global economy: the role of business networks," Environment and Planning A, Pion Ltd, London, vol. 32(2), pages 263-280, February.
  • Handle: RePEc:pio:envira:v:32:y:2000:i:2:p:263-280
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    Cited by:

    1. Bartley Tim, 2010. "Transnational Private Regulation in Practice: The Limits of Forest and Labor Standards Certification in Indonesia," Business and Politics, De Gruyter, vol. 12(3), pages 1-36, October.
    2. Baiardi, Donatella & Bianchi, Carluccio & Lorenzini, Eleonora, 2015. "The price and income elasticities of the top clothing exporters: Evidence from a panel data analysis," Journal of Asian Economics, Elsevier, vol. 38(C), pages 14-30.
    3. Scott, Allen J., 2006. "The Changing Global Geography of Low-Technology, Labor-Intensive Industry: Clothing, Footwear, and Furniture," World Development, Elsevier, vol. 34(9), pages 1517-1536, September.
    4. Yoke-Tong Chew & Henry Wai-Chung Yeung, 2001. "The SME Advantage: Adding Local Touch to Foreign Transnational Corporations in Singapore," Regional Studies, Taylor & Francis Journals, vol. 35(5), pages 431-448.

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