Business associations, clusters, and economic liberalization in developing countries: A contextual analysis

Kristjan Johannes Suse Jespersen

Student thesis: Master thesis

Abstract

Recently, there has emerged initial research outlining the important roles business associations (BA) play in assisting the expansion of developing country clusters in the face of new international pressures. When examining the important implications resulting from cluster entry into global value chains, the trajectory of development can have significantly different outcomes dependent on the capacity of the cluster to functionally upgrade through the development of backward, forward, and vertical linkages. Therefore, the aim of this thesis is to ascertain the contextual circumstances that allow BAs to effectively assist in the functional upgrading of clusters within developing countries. Furthermore, this analysis concentrates on former ISI country clusters, which having embraced free trade and entered different value chains, faced economic crises that threatened their clusters survival. Resulting from these efforts, the emphasis is directed towards understanding which BA characteristics and initiatives may best assist in providing capabilities for clusters integrated within global value chains to meet and overcome market stresses. This thesis determines the key factors necessary for BAs to best represent and advocate for their clustered firms. Case studies are utilized to draw useful information as to how BAs may facilitate a viable response within the market. Complementing the case study findings, a theoretical framework linking institutional theory, social capital theory, and transaction cost theory further elaborates and brings forth depth to the discussion. The analysis of the case studies and the theoretical framework substantiate the claim that effectively representational business associations are highly dynamic and important tools that assist in the development and strengthening of clusters.

EducationsMSc in Business, Language and Culture, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2008
Number of pages92