Effects of proximity dimensions on inter-firm cooperation among MSMEs in some selected leather industrial clusters in Nigeria

Abstract

This study was carried out to investigate the effects of proximity on inter-firm cooperation in some selected leather industrial clusters in Abia, Lagos and Kano states in Nigeria. MSMEs in these states' leather manufacturing clusters were specifically chosen for the study using a two-stage sampling approach. In the cities of Lagos, Aba, and Kano, 412 MSMEs' owners and managers were chosen using the snowballing sampling technique approach. The study's sample size was this. These owners and managers completed a questionnaire to provide information on the MSMEs. Descriptive statistics and inferential statistics were used to analyse the data collected. The regression results showed that all the proximity dimension variables had significant and positive relationships with marketing cooperation. Also, institutional proximity (INP) and organisational proximity (ORG) had significant and positive relationships with R&D cooperation and only social proximity (SOP) had a positive and significant relationship with innovation cooperation. However, the X2 test of significance showed that the pooled proximity dimensions and cooperation variables had the following significant and positive relationships with the cooperation variables: marketing cooperation [X2 (16,412) = 332.412, p = .000], R & D cooperation [X2 (8, 412) = 26.909, p = .001] and innovation cooperation [X2 (12, 412) = 41.342, p =.000]. Owing to these relationships, 9 gains out of 13 potential gains accrued to the MSMEs which may aid in the industrial growth and development of the country. These gains are: rapid innovation, new business formation, business growth, access to new markets and greater efficiency. The study concluded that due to their proximal locations, MSMEs in the selected Nigerian leather industrial clusters cooperated with one another and due to this, were able to appropriate some industrial growth and development-promoting gains to themselves. However, there were some other potential gains such as mutual learning, mutual stimulation of innovativeness, cost reduction and group purchasing that were not appropriated. The study therefore recommends that Nigerian governments, at all tiers, should formulate policies that encourage cluster formation and cooperation among the proximally located MSMEs to enable them appropriate all the potential gains derivable from cooperation.