Finance and Cluster‐Based Industrial Development in China
China’s rapid industrialization over the past several decades, which has occurred in the absence of well‐functioning financial markets, seems to defy conventional wisdom on the causal role of finance on industrialization. By conducting an in‐depth case study on a fast‐growing cashmere sweater cluste...
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| Veröffentlicht in: | Economic development and cultural change 2009-10, Vol.58 (1), p.143-164 |
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| container_title | Economic development and cultural change |
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| creator | Ruan, Jianqing Zhang, Xiaobo |
| description | China’s rapid industrialization over the past several decades, which has occurred in the absence of well‐functioning financial markets, seems to defy conventional wisdom on the causal role of finance on industrialization. By conducting an in‐depth case study on a fast‐growing cashmere sweater cluster in China, we show that through clustering an integrated production process can be divided into many incremental steps. As a result, there is a wide range of investment options in the cluster, and in many types of production, capital barriers to entry are modest. Within clusters, enterprises can often acquire trade credits from upstream or downstream firms and obtain informal financing from friends and relatives, which are used to mitigate working capital constraints. Local governments can play an active role in providing necessary public goods and promoting cluster growth. |
| doi_str_mv | 10.1086/605208 |
| format | Article |
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By conducting an in‐depth case study on a fast‐growing cashmere sweater cluster in China, we show that through clustering an integrated production process can be divided into many incremental steps. As a result, there is a wide range of investment options in the cluster, and in many types of production, capital barriers to entry are modest. Within clusters, enterprises can often acquire trade credits from upstream or downstream firms and obtain informal financing from friends and relatives, which are used to mitigate working capital constraints. Local governments can play an active role in providing necessary public goods and promoting cluster growth.</description><identifier>ISSN: 0013-0079</identifier><identifier>EISSN: 1539-2988</identifier><identifier>DOI: 10.1086/605208</identifier><identifier>CODEN: EDCCAF</identifier><language>eng</language><publisher>Chicago: The University of Chicago Press</publisher><subject>Business structures ; Capital investments ; Cashmere ; China ; Clothing industry ; Corporations ; Cultural change ; Developing countries ; Development studies ; Economic development ; Factories ; Finance ; Financial systems ; Human resource management ; Industrial development ; Industrialization ; Labor market ; Local government ; Logistics ; Small and medium sized enterprises ; Studies ; Sweaters ; Working capital ; Yarns</subject><ispartof>Economic development and cultural change, 2009-10, Vol.58 (1), p.143-164</ispartof><rights>2009 by The University of Chicago. 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| ispartof | Economic development and cultural change, 2009-10, Vol.58 (1), p.143-164 |
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| source | PAIS Index; Business Source Complete; Sociological Abstracts; Applied Social Sciences Index & Abstracts (ASSIA); Jstor Complete Legacy |
| subjects | Business structures Capital investments Cashmere China Clothing industry Corporations Cultural change Developing countries Development studies Economic development Factories Finance Financial systems Human resource management Industrial development Industrialization Labor market Local government Logistics Small and medium sized enterprises Studies Sweaters Working capital Yarns |
| title | Finance and Cluster‐Based Industrial Development in China |
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