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Clusters and Global Value Chains: a Comparative Study of Leather Footwear Clusters in Addis Ababa, Ethiopia


Nowadays, industrial clusters are becoming common in developing countries, found in a range of sectors and regions. There are some case materials that suggest that few of these clusters have already turned themselves in to dynamic clusters by meeting the challenge of both local and international competition. However, footwear clusters from Ethiopia which are largely constituted by micro, small, and medium enterprises (MSMEs) have not yet duplicated their local competitiveness to the international market. This and other cluster cases have attracted considerable interest from both academics and practitioners for many years. Despite the growing interest, detailed information on MSME clusters in Ethiopia remains limited. Moreover, majority of the studies ignored the external relationships that clusters have with their external/foreign buyers.  This study, therefore, applied an integrated framework of firm performance, consisting of cluster, global value chain and internal firm factors, to the leather footwear clusters in Ethiopia. Using the same framework, a comparative investigation was also conducted between Natural and Artificial

With a Concurrent Mixed Method design, a total sample size of 250, comprising 150 and 100 from natural and artificial leather footwear clusters, respectively, based on a stratified random sampling technique, was taken for the study. Thematic content analysis was employed for the qualitative investigation while a range of statistical analyses techniques including structural equation modeling were applied for the quantitative part of the study.

The results showed that the integrated model makes a strong case of firm performance. Larger number of path relationships between the factors and the performance of firms in the integrated model were found to be generalizable across cluster models. The comparative investigation also revealed that although there were some positive outcomes with regards to bilateral, multilateral and institutional linkages, in general, it was challenging to create the envisaged advantages of clustering from the government’s intervention. The main challenge of transforming the static part of the natural cluster remains to be seen in the artificial cluster. Creating appropriate linkage with external/foreign buyers that could lead to better source of learning and upgrading also adds to the challenge. These findings, hence, provides both theoretical and practical implications

Corporate Author: 
Ethiopian Economics Association (EEA)
Ethiopian Economics Association (EEA)
Primary Descriptors: 

Global value chains, Natural cluster

Secondary Descriptor: 

Artificial cluster,  Firm performance

Geographic Descriptors: 
Cataloge Date: 
Broad Subject heading: 
Industrial Clusters
Call Number: 
330.963 PRO 2017
Serial Key Title: 
Proceedings of the Fourteenth International Conference on the Ethiopian Economy
Publication catagory: 
Content type: 
Publication date: 
2017-06-01 00:00:00
Conference Place: 
Addis Ababa, EEA Multi-purpose Building Conference Hall
Place of publication: 
Addis Ababa, Ethiopia
Type of material: 
Current frequency: 
Conference date: 
July 21 – 23, 2016