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Exit, Voice, And Loyalty In The Industrial District: The Case Of Prato


  • Gabi Dei Ottati


In this paper the "exit, voice and loyalty" approach by Albert O. Hirschman is applied to the case of the rise and evolution of the Prato industrial district, from post-war days until now. This is done, not so much to gain a better understanding of the specific events in Prato, but rather to shed light on the recuperation mechanisms that characterise the fundamental economic relations within the industrial district: i.e. labour relations, subcontracting relations, and relations between firms. The analysis shows how the higher competitiveness and adaptability of the district derives from the relative abundance of exit mechanisms, but also from the wealth of forms of voice, both individual and collective. These are continually being renewed within the district, thus bringing about an alternation and recombination of the mix of exit and voice, and also of the interaction models between them. The wealth of expressions of voice is a distinctive element of district relations which is linked to the multiplicity of loyalty relations (team attachment, professional category membership, local community sense of membership...) existing within the district.

Suggested Citation

  • Gabi Dei Ottati, 2000. "Exit, Voice, And Loyalty In The Industrial District: The Case Of Prato," Working Papers wp175, Centre for Business Research, University of Cambridge.
  • Handle: RePEc:cbr:cbrwps:wp175
    Note: PRO-1

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    References listed on IDEAS

    1. Ottati, Gabi Dei, 1994. "Trust, Interlinking Transactions and Credit in the Industrial District," Cambridge Journal of Economics, Oxford University Press, vol. 18(6), pages 529-546, December.
    2. Klein, Benjamin & Crawford, Robert G & Alchian, Armen A, 1978. "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics, University of Chicago Press, vol. 21(2), pages 297-326, October.
    3. Hirschman,Albert O., 1981. "Essays in Trespassing," Cambridge Books, Cambridge University Press, number 9780521282437, March.
    4. Marco Bellandi, 1992. "The incentives to decentralized industrial creativity in local Systems of small firms," Revue d'Économie Industrielle, Programme National Persée, vol. 59(1), pages 99-110.
    5. Helper, Susan, 1991. "Strategy and Irreversibility in Supplier Relations: The Case of the U.S. Automobile Industry," Business History Review, Cambridge University Press, vol. 65(04), pages 781-824, December.
    6. G Seravalli, "undated". "Labour Division And The Organisation Of Inter-Firm Relations," Dundee Discussion Papers in Economics 063, Economic Studies, University of Dundee.
    7. Freeman, Richard B, 1976. "Individual Mobility and Union Voice in the Labor Market," American Economic Review, American Economic Association, vol. 66(2), pages 361-368, May.
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    Cited by:

    1. Leonardo Becchetti & Stefano Castriota, 2008. "Is Fair Trade Honey Sweeter? An empirical analysis on the effect of affiliation on productivity," Working Papers 104, ECINEQ, Society for the Study of Economic Inequality.

    More about this item


    exit and voice; industrial district;

    JEL classification:

    • D49 - Microeconomics - - Market Structure, Pricing, and Design - - - Other
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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