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The role of clustering in rural industrialization: A Case Study of the Footwear Industry in Wenzhou

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

Abstract

"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 upper level governments, this region seemed to lack all the conditions necessary for economic growth. However, over the past several decades Wenzhou has developed the most dynamic private sector in China, and has accordingly achieved one of the fastest growth rates. In particular, the footwear industry in Wenzhou has grown from a negligible market share to the largest in China. Here, we report a survey of 140 Wenzhou-based footwear enterprises of various scales, and use this information to examine the driving forces behind the dramatic rural industrial growth seen in this region. Our results show that clustering deepens the division of labor in the production process and makes it possible for small entrepreneurial firms to enter the industry by focusing on a narrowly defined stage of production. Therefore, Wenzhou represents an example of how clustering plays a significant role in helping fledgling rural industries overcome the growth constraints of capital and technology in the incipient stage of industrialization." from Authors' Abstract

Suggested Citation

  • Huang, Zuhui & Zhang, Xiaobo & Zhu, Yunwei, 2007. "The role of clustering in rural industrialization: A Case Study of the Footwear Industry in Wenzhou," IFPRI discussion papers 705, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:ifprid:705
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    References listed on IDEAS

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    Cited by:

    1. Fleisher, Belton & Hu, Dinghuan & McGuire, William & Zhang, Xiaobo, 2010. "The evolution of an industrial cluster in China," China Economic Review, Elsevier, vol. 21(3), pages 456-469, September.
    2. Xu, Chenggang & Zhang, Xiaobo, 2009. "The evolution of Chinese entrepreneurial firms: Township-village enterprises revisited," IFPRI discussion papers 854, International Food Policy Research Institute (IFPRI).
    3. Jianqing Ruan & Xiaobo Zhang, 2009. "Finance and Cluster-Based Industrial Development in China," Economic Development and Cultural Change, University of Chicago Press, pages 143-164.
    4. Mano, Yukichi & Suzuki, Aya, 2013. "Measuring Agglomeration Economies: The Case of the Ethiopian Cut Flower Industry," Discussion Papers 2013-04, Graduate School of Economics, Hitotsubashi University.
    5. Shahid Yusuf, 2012. "From Technological Catch-up to Innovation : The Future of China’s GDP Growth," World Bank Other Operational Studies 12781, The World Bank.
    6. Qiuqiong Huang & Scott Rozelle & Dinghuan Hu, 2007. "Pump-set clusters in China: explaining the organization of the industry that revolutionized Asian agriculture," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 14(2), pages 75-105, December.
    7. Long, Cheryl & Zhang, Xiaobo, 2011. "Cluster-based industrialization in China: Financing and performance," Journal of International Economics, Elsevier, pages 112-123.
    8. Ayele, Gezahegn & Moorman, Lisa & Wamisho, Kassu & Zhang, Xiaobo, 2010. "Infrastructure and cluster development," IFPRI discussion papers 980, International Food Policy Research Institute (IFPRI).
    9. Hu, Cui & Xu, Zhaoyuan & Yashiro, Naomitsu, 2015. "Agglomeration and productivity in China: Firm level evidence," China Economic Review, Elsevier, vol. 33(C), pages 50-66.
    10. 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.
    11. Argentino Pessoa, 2011. "Externalities, clusters and economic growth: The Cluster Policy Paradox," ERSA conference papers ersa11p896, European Regional Science Association.
    12. Huang, Jikun & Wu, Yunhua & Yang, Zhijian & Rozelle, Scott & Fabiosa, Jacinto & Dong, Fengxia, 2012. "Marketing China's milk: A case study of the sales activity of dairy farmers in greater Beijing," China Economic Review, Elsevier, vol. 23(3), pages 675-689.
    13. Kimura, Yuichi, 2011. "Knowledge Diffusion and Modernization of Rural Industrial Clusters: A Paper-manufacturing Village in Northern Vietnam," World Development, Elsevier, vol. 39(12), pages 2105-2118.
    14. Zhang, Xiaobo, 2016. "Building effective clusters and industrial parks," IFPRI discussion papers 1590, International Food Policy Research Institute (IFPRI).
    15. Long, Cheryl & Zhang, Xiaobo, 2012. "Patterns of China's industrialization: Concentration, specialization, and clustering," China Economic Review, Elsevier, vol. 23(3), pages 593-612.
    16. Ali, Merima & Peerlings, Jack H.M., 2011. "Farm Households Entry and Exit Into and From Non-farm Enterprises in Rural Ethiopia: Does Clustering Play a Role?," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114220, European Association of Agricultural Economists.
    17. repec:eee:ecosys:v:41:y:2017:i:2:p:179-202 is not listed on IDEAS
    18. Ruan, Jianqing & Zhang, Xiaobo, 2008. "Credit constraints, organizational choice, and returns to capital: Evidence from a rural industrial cluster in China," IFPRI discussion papers 830, International Food Policy Research Institute (IFPRI).
    19. Ali, Merima & Peerlings, Jack & Zhang, Xiaobo, 2010. "Clustering as an organizational response to capital market inefficiency: Evidence from handloom enterprises in Ethiopia," IFPRI discussion papers 1045, International Food Policy Research Institute (IFPRI).

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    Keywords

    Cluster analysis; Industrialization; Finance; Economic development; Nonfarm economy;

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