Clustering enterprises into eco-industrial parks: Can interfirm alliances help small and medium-sized enterprises?

Abstract

Eco-Industrial Parks are a proven approach that balances environmental protection practices and regional industrial development. However, it is a challenge to relocate small and medium-sized enterprises into industrial parks. Recently in China, there is a new phenomenon where interfirm alliances have started to facilitate local government in promoting the relocation of small enterprises to industrial parks. In this paper, we attempt to identify the role that these interfirm alliances can play. This study uses a survey method to investigate this question in Jieyang City, and 598 valid questionnaires were collected. The validity and reliability of the relevant factors were tested using factor analysis, and ordered logit-regression was adopted to quantitatively assess the effect of the extracted factors on the dependent variable. The results highlight five key influencing factors in alliances: policy, market, managerial, financial, and technical. All factors significantly affect the relocation decisions of small enterprises according to various firm characteristics. Among these factors, the financial factor has the strongest influence on alliances among manufacturing firms. Policy and managerial aspects of alliances are critical to encouraging small enterprises to move into industrial parks while larger enterprises consider financial and technical effects to be more important. The market factor of alliances affects family-owned SMEs much more than it does for other enterprises. In summary, interfirm alliances are an essential policy implementation tool that has the potential to help local government in promoting the relocation of enterprises into eco-industrial parks and to improve industrial environmental performance.