What Gives Industrial Clusters a Sustained Growth
Published: 2021
Author(s) Name: Sweta Singh |
Author(s) Affiliation: Assistant Professor, Indian Institute of Management, Amritsar, India
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Abstract
This article analyzes the sustainable
practices and operations of
firms belonging to industrial clusters.
The effective functioning of
an industrial cluster is explored
and argued from two prominent
paradigms of organizational
theory, the network paradigm,
and the resource dependence
paradigm. From the net work
theory perspective, embedded relations,
trust-based relations, and
matching theory explanations are
argued to discourage opportunistic
behavior. Resource dependence
theory focuses on the
firm’s ability to establish relationships
to access resources, creating
dependencies, power imbalances,
and uncertainty among
firms. In the case of the industrial
cluster, social proximity acts
as a source of strength. The inter-
organizational relationships
depend on trust, embeddedness,
and informality of relationships.
Keywords: N.A.
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