Abstract
Inter-firm cooperation is one important instrument for the way of industrial cluster development in developing countries. We utilize the case of Lao garment industry in Vientiane Capital City to examine the relationship between types of cooperation and firm performance. In order to prove our hypotheses, factor analysis and multiple regression analysis methods were used for the information obtained from field survey. The results of the study suggest that cooperation with subcontractors, business associations and distant buyers influence firm performance. On the contrary, cooperation among garment firms and distant suppliers seems to be less effective in this study.
Highlights
Many existing studies focus only cooperation of firms in the cluster, while neglecting both types of cooperation between cluster members and other
Our paper overcomes some of these shortcomings by applying to the case of garment industry cluster in Vientiane Capital City (VCC), Lao PDR
The majority of the case studies on industrial clusters stress the need for joint action to overcome the new commercial pressures that many of the clusters have faced due to trade liberalization (Mexico; India), quality or environmental standards (Pakistan; palar Valley, India), increased global competition (Brazil), or loss of traditional markets (India) (Schmitz and Nadvi, 1999)
Summary
Many existing studies focus only cooperation of firms in the cluster, while neglecting both types of cooperation between cluster members and other (remote firms). We aim at answering these two main questions: what are the Lao garment companies’ cooperative behaviors with both cluster members and outside agents and do enterprises cooperate with others performed better than those which have not? The results of this study show that Lao garment firms have cooperation with both cluster members and outside agents (Note 3). The keys for success of industrial cluster in developing countries are the cooperation among large firms and SMEs, the collective responsibility of local association, the relationship between the parties along the value chain and financial incentives by support industries (Fischer and Reuber, 2003). There are number of case studies of industrial clusters in developing countries. These case studies provide the important information of the firm’s behaviors to cope with the environmental change. The larger firms in the cluster access to export markets have been the driving force to improve their competitiveness
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