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The Formation of Wenzhou Footwear Clusters: How Were the Entry Barriers Overcome?

  • Huang, Zuhui
  • Zhang, Xiaobo
  • Zhu, Yunwei

Wenzhou used to be one of the poorest regions in eastern China. With limited arable land, poor road access to major cities, and little support from the government, it seemed to lack all the necessary conditions for economic growth according to the standard textbook. However, over the past several decades, Wenzhou has achieved one of the fastest growing rates and owned the most dynamic private sector in China. The footwear industry in particular has grown from a negligible place to the largest market share and has formed one of the largest industry clusters in China. Therefore, the footwear industry provides us with a good example to unde rstand the driving forces behind the dramatic rural industrial growth. For this study, we undertake a survey on about 140 enterprises at different scales in Wenzhou. The survey enables us to examine how the start -up capital, credit, technology, and institutional barriers have been overcome in the formation process.

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File URL: http://purl.umn.edu/25371
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Paper provided by International Association of Agricultural Economists in its series 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia with number 25371.

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Date of creation: 2006
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Handle: RePEc:ags:iaae06:25371
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  1. Ayyagari, Meghana & Demirguc-Kunt, Asli & Maksimovic, Vojislav, 2006. "How important are financing constraints ? The role of finance in the business environment," Policy Research Working Paper Series 3820, The World Bank.
  2. Yujiro HAYAMI & Masao KIKUCHI & Esther B. MARCIANO, 1998. "Structure Of Rural-Based Industrialization: Metal Craft Manufacturing On The Outskirts Of Greater Manila, The Philippines," The Developing Economies, Institute of Developing Economies, vol. 36(2), pages 132-154, 06.
  3. Sonobe, Tetsushi & Hu, Dinghuan & Otsuka, Keijiro, 2004. "From inferior to superior products: an inquiry into the Wenzhou model of industrial development in China," Journal of Comparative Economics, Elsevier, vol. 32(3), pages 542-563, September.
  4. Schmitz, Hubert, 1999. "Global Competition and Local Cooperation: Success and Failure in the Sinos Valley, Brazil," World Development, Elsevier, vol. 27(9), pages 1627-1650, September.
  5. T. Sonobe & D. Hu & K. Otsuka, 2002. "Process of Cluster Formation in China: A Case Study of a Garment Town," Journal of Development Studies, Taylor & Francis Journals, vol. 39(1), pages 118-139.
  6. Eiji Yamamura & Tetsushi Sonobe & Keijiro Otsuka, 2003. "Human capital, cluster formation, and international relocation: the case of the garment industry in Japan, 1968--98," Journal of Economic Geography, Oxford University Press, vol. 3(1), pages 37-56, January.
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