Tetsushi Sonobe

Process of Cluster Formation in China: A Case Study of a Garment Town

In China industrial clusters consisting of small and medium enterprises have been proliferating in areas where private sectors have successfully developed. This study inquires into the process of forming a new industrial cluster and the roles of local and distant urban traders in the garment industry in China. We found that the local marketplace, where enterprise managers can easily purchase materials from and sell products to local traders, plays a critical role in stimulating the entry of new enterprises in the early stage of cluster development. As a cluster develops, however, entrepreneurial ability in producing high-quality products and marketing them to urban traders plays a more significant role.

An Inquiry into the Rapid Growth of the Garment Industry in Bangladesh

The export-oriented garment industry in Bangladesh has grown rapidly for the last 3 decades and now ranks among the largest garment exporters in the world. While its early success is attributed to the initial technology transfer from South Korea, such a one-time infusion of knowledge alone is insufficient to explain the sustained growth for 3 decades. This article uses primary data collected from knitwear manufacturers and garment traders to explore the process of the continuous learning of advanced skills and know-how. It finds, among other things, that the high profitability of garment manufacturing due to the initial infusion of specific human capital attracted a number of highly educated entrepreneurs to the industry, that the division of labor between manufacturers and traders has facilitated the expansion of the industry, and that enterprise growth has lasted long because of the continuous learning from abroad by the highly educated entrepreneurs.

Efficiency of Land Allocation through Tenancy Markets: Evidence from China

Tenancy markets provide an opportunity to trade land between labor-scarce farm households and labor-abundant households. In China and other rapidly growing countries in Asia where rural to urban migration is becoming active, facilitating well-functioning tenancy markets is important to increase farm size and farmer’s income. In China, however, individual land rights are weak and in many communities land may be reallocated by village leaders to other households if it is rented out. We hypothesize that the risk of expropriation of rented-out land is a major constraint on land rental transactions in China. We find empirical evidence in support of this hypothesis using farm household data.

Beyond the Environmental Kuznets Curve: a comparative study of SO2 and CO2 emissions between Japan and China

This study is the first systematic attempt to test statistically the contrasting hypotheses on the emission of SO2 and CO2, and energy consumption in Japan and China for the last few decades. We postulate the hypotheses that local governments have incentives to internalize the local external diseconomies caused by SO2 emissions, but not the global external diseconomies caused by CO2 emissions. To substantiate our hypotheses, we decompose emissions of SO2 and CO2 into two factors: the emission factor (i.e. emission per energy use) and energy consumption. The results show that the prefectures where past energy consumption was high tend to reduce the emission factor of SO2 significantly in Japan, while we do not find such a tendency in China. There is also evidence that neither per capita income nor past energy consumption affects the CO2 emission factor and energy consumption significantly in both Japan and China, implying that an individual country has few incentives to reduce CO2 emissions.

An Inquiry into the Development Process of Village Industries: The Case of a Knitwear Cluster in Northern Vietnam

Abstract While village industries are known to have high potential to grow, their growth process has seldom been analysed. This study explores the development process of a rapidly growing village-based garment cluster in northern Vietnam. We found that both the human capital and social capital (measured by the kinship ties with overseas Vietnamese traders) of the proprietors facilitated their innovative entry into new export markets. Furthermore, general human capital acquired by schooling and specific human capital acquired by management experience are found to have contributed to the adoption of a vertically integrated production system, which, in turn, contributed to enhanced enterprise performance.

An Exploration into the Successful Development of the Leather-Shoe Industry in Ethiopia

The leather-shoe industry in Ethiopia is thriving, and in the early 2000s it managed to recover the domestic market which had once been swept by imported Chinese shoes. Using primary enterprise-level data, this paper finds that the industry has been growing not only because of a number of new entrants but also because of the growth of enterprises that have been improving product quality and developing new marketing systems. Such multifaceted improvements have been introduced by highly educated entrepreneurs, who have successfully expanded the size of their enterprises. This development pattern is similar to that commonly found in East Asia.

The Division of Labor and the Formation of Industrial Clusters in Taiwan

While the role of clusters in promoting industrial development has been increasingly recognized in the literature, the locational choice of industrial clusters and the underlying factors affecting such a choice have seldom been analyzed, particularly in the context of industrial development in developing countries. In this article, the authors hypothesize that industrial clusters tend to be formed in suburban areas, where the division of labor among enterprises producing diverse products is intense. They obtained supportive evidence through regression analyses of changes in employment and value-added ratio using township-level census data of selected industries in Taiwan from 1976 to 1996.

A new decomposition approach to growth accounting: derivation of the formula and its application to prewar Japan

Abstract How can an economy grow in the early stages of economic development in the absence of total factor productivity growth, as has been allegedly the case in fast-growing East Asian economies? This paper advances the hypothesis that capital deepening associated with transformation of industrial structure can sustain growth for a long period without causing a decline in the rate of returns to capital. To examine our hypothesis, we develop a new decomposition formula for growth accounting that highlights such capital deepening. The formula is applied to data from prewar Japan, to assess the significance of industrial transformation in economic growth.

A Cluster-Based Industrial Development Policy for Low-Income Countries

The need to construct an effective strategy for industrial development in low-income countries has been largely ignored by development economists because industrial policies have failed in many developing countries. This does not imply, however, that industrial development cannot be promoted. This paper attempts to synthesize the conventional wisdom in development economics with recent advancements in various fields of economics (such as theories of endogenous growth and agglomeration economies) to provide a useful framework to design a strategy for industrial development, which consists of investments in managerial human capital followed by the provision of credit and the construction of industrial zones.

Global Value Chains and Market Formation Process in Emerging Export Activity: Evidence from Ethiopian Flower Industry

Abstract This article provides a case study of the Ethiopian flower export industry which successfully emerged at time when the EU market (main destination) was already characterised by increasingly stringent standards and delivery requirements. Entering this market required a multitude of capabilities at firm, sector and national levels. Several of these capabilities were absent or weak in the domestic market when the new activity kicked off. The article analyses how the capabilities of individual firms and the industry at large co-evolved and the role of various actors in the ‘market formation’ process.