Investigating the Determinants of Productivity Growth of The Small Scale Garment Industrial Cluster In Aba, Nigeria.

Benjamin Asiegbu; Nwogwugwu U. C. C; Metu A. G.

Benjamin Asiegbu Department of Economics, Nnamdi Azikiwe University, Awka, Nigeria
Nwogwugwu U. C. C Department of Economics, Nnamdi Azikiwe University, Awka, Nigeria
Metu A. G. Department of Economics, Nnamdi Azikiwe University, Awka, Nigeria

Keywords: Industrial Cluster; Small Scale; Productivity Growth;Agglomeration.

Abstract

Classical agglomeration theory posits that production is facilitated when there is a clustering of economic activities. Although, the theory failed to explain which of the economic activity will lead to the formation of the cluster, the theory also failed to explain what determines productivity growth in such a cluster. Hence this study investigates the determinants of industrial cluster productivity growth in the production activity using the small scale garment industrial cluster in Aba, Nigeria. This study employed the questionnaire for its data collection from a sample of 300 small scale garment operators in Aba. The Multi-criteria Decision Analysis (MCDA) and simple percentage statistics were used for the analysis. The study found the major determinants of productivity growth of the small scale garment industrial cluster in Aba to include; small market for the products, high competition from imported foreign goods, low quality of products, tax policy, multiplicity of taxes, levies and other rates, and high rate of infrastructural decay. Based on the findings of this study, we recommend that government should prioritize industrial cluster development in its development policies through improving her tax policies. Flexible trade regulations and infrastructural development should be embarked on for industrial sector productivity growth.

Downloads

Download data is not yet available.

References

[1] Adrian [2002]. Cluster theory and practice; Advantages for the small business locating in a vibrant cluster. Journal of Research in Marketing and Entrepreneurship. 4(3). 206-228.
[2] Akinwale & Oludayo (2019). Industial policy and industial sector productivity in Nigeria. Financial Markets, Institutions and Risks, Volume 3, Issue 2, 2019. https://doi.org/10.21272/fmir.3(2).44-51.2019. Accessed 7/9/2021.
[3] Akintoye & Oluwabunmi (2019). Role of productivity growth in economic growth: Evidence from Nigeria (1970-2010). SAGE journals. https://doi.org/10.1177/0972150919848932. Accessed 7/9/2021.
[4] Arrow, (1962). The economic implication of learning by doing. Review of economic studies. 29, 155-173.
[5] Bao, B. H. & Bao, B. H. (1989). An empirical investigation of the association between productivity and firm value. Journal of Business Finance and Accountancy, 16, 699-717.
[6] Bloom & Van (2010). Why do management practices differ across firms and countries. Journal of Economic Perspectives, vol. 24, No. 1, WINTER 2010, 203-24.
[7] Brusco & Sabel, (1982). The emilian model: Productive decentralization and social integration.
[8] Cheryl Long (2010). Cluster-based industrialization in China: Financing and performance.
[9] Chinda, & Mohamed, (2008). Structural model of construction safty culture. Engineering, construction and architectural management, 15(2), 114-131.
[10] Chinitz, (1961). Contrasts in agglomeration: New York and Pittsburgh. American Economic Review. 51(2), 279-289.
[11] Chow, (2013). Multi-criteria decision methods: An attempt to evaluate and unify mathematical and computer modelling, 37(9-10), 1099-1119.
[12] Ciccone, A., & Hall, R. E. (1996). Productivity and the density of economic activity. American Economic Review, 86(1), 54-70.
[13] Cooke, P. & Morgan, K. (1998). The associational economy: Firms, regions and innovation. Oxford University Press, Oxford.
[14] Diewert & Lawrence (2006). The contribution of productivity, price changes and firm size to profitability. Journal of productivity analysis, 26(1), 1-13.
[15] Doloi, H., Iyer, K. C. & Sawhney, A. (2011). Structural Model for assessing impacts of Contractor’s performance on project success. International Journal of project Management, 29, 687-695.
[16] Fabrizio Pompei (2016). Determinants of Productivity at Firm and Industry Level. Department of Economics, University of Perugia.
[17] Fabrizio, P (2016). Determinants of Productivity at firm and industry level. Department of Economics, University of Perugia.
[18] Francisco Puig & Miguel Gonzalez-Loureiro (2017). Clusters, Industrial Districts and Strategy. Journal of Regional Research. 39, pp. 5-13.
[19] Frank, P. & Werner S. (2009). Industrial Districts and Local Economic Regeneration: Overview and Comments. ResearchGate, https://www.researchgate.net. Assessed 07/09/2021.

[20] Fujita, M., & Thisse, J. F. (2002). Does Geographical Agglomeration Foster Economic Growth ? And who Gains or Losses from it? Japanese Economic Review. 54(2), 121-145.
[21] Fulop, J. (2015). Introduction to Decision Making Methods, Working Paper, Laboratory of Operations Research and Decision Systems, Computer and Automation Institute. Hungarian Academy of Science, Budapest, 6pp.
[22] Gordon, I. R., & McCann P. (2000). Industrial clusters: Complexes, Agglomeration and/ or Social networks. Urban Studies, 37(3), pp. 513-532.
[23] Green, P. J. (1990). On use of the EM for penalized likelihood estimation. Journal of the Royal Statistical Society, series B (Methodological), 52, 443-452.
[24] Henderson, J.V. (2011). Industrial Development in Cities. The Journal of Political Economy. 103(5), pp. 1067-1090.
[25] Henderson, J. V. (1986). Efficiency of Resource Usage and City Size. Journal of Urban Economics. 19, pp. 47-70.
[26] Hoover, E. M. (1937). Location Theory and the Shoe and Leather Industries. Cambridge, MA: Harvard University Press.
[27] Pekka, I. et al [2004]. The roles of Employer and Employee Characteristics for plant Productivity. journal of productivity analysis, 2004, vol.21, issue3, 249-276.
[28] Ivars Kassalis (2011). Industrial Clusters: A Coefficient factor for Integrated Development. Journal of Intellectual Economics. 5(2), pp. 212-223.
[29] Kiker, G. A., Bridges, T. S., Varghese, A., Seager, T. P., & Linkov, I. (2015). Application of Multi-criteria decision analysis in environmental decision-making. Integrated Environmental Assessment and Management, 1(2), pp. 95-108.
[30] Lawrence, U. E. (2013). Industrialization and national prosperity: Lessons for the developing countries, (2nd edition). Luzek Publishers, London.
[31] Lundvall, B. A. (1992). Explaining Inter-Firm Cooperation and Innovation: Limits of the Transaction-Cost Approach in Grabher: The Embedded Firm: On the Socioeconomics of Industrial Networks, Routledge, London, pp. 52-64.
[32] Malmberg, A., & Maskell, P. (2002). The elusive concept of Localization Economics-Towards a Knowledge-based Theory of Spatial Clustering. AAG Annual Conference. New York, 27 february-3march.
[33] Mojtaba, A. et al (2013). A study of the Factors Affecting Productivity. AENSI Journals, Advances in Environmental Biology, 7(11) Oct 2013, 3350-3355.
[34] Mytelka, L. (2004). From Cluster to Innovation System in Traditional Industries. Innovation Systems and Innovative Clusters in Africa, ed. B. L. M. Mwamila et al. proceedings of a conference in Bagamoyo, Tanzania.
[35] Natalia, V., & Natalia, A. V. (2016). Clustering as Modern Concept of Regional Development (Experience of Japan). http://www.ekonomika.org.rs, Scientific Review Article, 62(1), pp. 97-112
[36] Onwuchekwa, et al., (2017). Small and Medium Scale Enterprises (SMEs) and Industrial Development of Onitsha Metropolis: A Cluster Lead Approach. IIARD International Journal of Economics and Business Management. 3(10), 2017.
[37] Porter, M. E. (1990). The Comparative Advantage of Nations, New York: Macmillan.

[38] Schmitz, H. (2004). Collective Efficiency: Growth path for Small-Scale Industry. Journal of Development Studies. 31(4), pp. 529-566.
[39] Vladimir, V. M., et al (2016). Innovation Clusters: Advantages and Disadvantages. International Journal of Economics and Financial Issues, 6(S1), pp. 270-274).
[40] Yin, R. K. (2013). Case Study Research: Design and Methods, 3rd edition, Sage Publications, Califonia, US, pp. 181.
[41] Yohan, Kurniawan et al., (2013). Employing Industrial Cluster Concept as a Strategy to Improve Small Industries in Kelantan, Malaysia. International refereed research journal. www.researchersworld.com. 4(2), April 2013.