Title: Linkage Formation by Small Firms: The Case of A Rural Cluster in Indonesia
Abstract: Abstract This paper analyses forward linkages formed by small firms in Ceper, a rural metal-casting cluster in Central Java, and examines the effects of these linkages in promoting the firms' development. Firms in the cluster have developed subcontracting linkages with assemblers in the urban modern sector, and putting-out linkages with wholesalers located in the cities. The linkages provide benefits beyond product sales: some firms are stimulated to improve technological capabilities through subcontracting linkages with assemblers; others are supported by trade credits embedded in linkages with wholesalers. In comparing these effects with external assistance, the firms rate technological help from private institutions with a business orientation more highly than that from assemblers, and support from wholesalers more highly than any other source of financial assistance. Government assistance receives a relatively low rating. There is little evidence of effects of clustering, partly because firms consider linkages with the outer economy more strategic. Additional informationNotes on contributorsYuri Sato This paper is part of the outcome of research and fieldwork I conducted during a stay in Indonesia from 1996 to 1999 as an overseas senior research fellow of the Institute of Developing Economies in Japan.For help in conducting fieldwork in Ceper, I am very grateful to the respondents, the industrial cooperative and members of UIUKK (Information Unit for Small Enterprises and Cooperatives)Batur Jaya, a private guidance unit under the Astra Dharma Bhakti Foundation, especially Umardani N.H., Soejitno, Anas Yusuf Mahmudi, Krisni Murti M.S., and Yohanes Sancahyohadi.The paper also benefited much from the helpful comments of an anonymous referee.
Publication Year: 2000
Publication Date: 2000-04-01
Language: en
Type: article
Indexed In: ['crossref']
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Cited By Count: 71
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