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Measuring Agglomeration Economies: The Case of the Ethiopian Cut Flower Industry

  • Mano, Yukichi
  • Suzuki, Aya

Industrial clusters are ubiquitous, and the associated low transaction costs allow producers to benefit from information spillovers, interfirm division and specialization of labor, and the development of skilled-labor markets. Previous studies, however, have seldom quantified the benefits on business performance. Ethiopia’s cut flower industry provides a rare opportunity to compare agglomerated with dispersed producers. Agglomerated farms frequently share technological knowledge and market information to decide when and even whether products are worth harvesting and shipping and to select product varieties. Econometric results indicate that agglomerated farms export higher valued flowers and achieve higher productivity and profitability. These findings imply that promotion of industrial clusters would further develop the industry.

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Paper provided by Graduate School of Economics, Hitotsubashi University in its series Discussion Papers with number 2013-04.

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Length: 40 p.
Date of creation: Apr 2013
Date of revision:
Handle: RePEc:hit:econdp:2013-04
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