Role of Small and Medium Enterprise Clusters in Urban–Rural Linkage: A Study Based on Manufacturing SMEs of Khulna City, Bangladesh

Abstract

This study explores the role of small and medium enterprise (SME) clusters in urban–rural linkages, an increasingly acceptable strategy in policy planning for regional development. As this approach to development has mostly been studied from a macro perspective, there is paucity of research from a micro perspective, particularly in the context of Bangladesh. This study, thus, aims to explore the contribution of manufacturing SME industry clusters in linking urban and rural regions. The data used in the study has been collected from 119 SME entrepreneurs using a structured questionnaire. Factor analysis and logistic regression have been applied to explore the contribution of industrial clusters in urban–rural linkages, focusing on the city of Khulna as the study area. The findings show that such SME clusters can positively contribute towards linking the two territories through two main forces, namely, funds and mobility. The findings provide useful insights for policymakers and urban planners to take initiatives for identifying and developing such SME industry clusters instead of focusing on the development of large industries, both in urban and rural areas to enhance balanced regional development. In highlighting the contribution of SME industry cluster as a micro level actor in the process of urban-rural integration, the study aims to make a meaningful contribution to literature in the field of development planning.