Industrial clusters in the developing economies: Insights from the Iranian carpet industry

• Author: Omar Al‐Tabbaa,Zahra Vazife,Fahime Sadat Saadatyar,Giovanni Battista Dagnino
• Published date: 01 March 2020
• DOI: http://doi.org/10.1002/jsc.2324
• Date: 01 March 2020

RESEARCH ARTICLE

Industrial clusters in the developing economies: Insights

from the Iranian carpet industry

Fahime Sadat Saadatyar

1

| Omar Al-Tabbaa

2

| Giovanni Battista Dagnino

3

|

Zahra Vazife

1

1

Faculty of Management, University of Sistan

and Baluchistan, Zahedan, Iran

2

University of Kent, Canterbury, UK

3

University of Rome LUMSA, Palermo, Italy

Correspondence

Omar Al-Tabbaa, University of Kent,

Canterbury, UK.

Email: ofoa@kent.ac.uk

Abstract

Industrial clusters are perceived as potential drivers of small and medium-sized enter-

prises development and efficient policy instruments to lead national and regional

innovation and growth. However, these clusters in developing economies are typi-

cally placed in complex environments that impose a mix of serious challenges that

adversely affect their overall performance. Therefore, this study aims to analyze the

nature of these challenges and understand their dynamics using a case study of a car-

pet industry cluster in Iran. Using multiple sources of evidence, the study reveals two

distinct, yet interrelated, levels of challenges: micro and macro. Under each level, a

number of key dimensions were identified and theoretically linked which helped to

conceptualize the structure of these challenges and model their dynamics.

1|INTRODUCTION

For the last decades, industrial agglomerations have played a leading

role in the development of cities and regions and have formed a new

industrial organizational basis for economic development. A promi-

nent example of this activity is the business concentration in specific

geographic locations, often referred to as clusters (Pe'er & Keil, 2013).

It is claimed that clustered firms can achieve benefits as a result of

geographical proximity and the continuous interaction between their

agents (Tan, 2006; Villaverde, Elche, & Perez, 2017). Clusters are con-

sidered to be core entities of economic growth and innovation in the

modern world (Njøs & Jakobsen, 2016). Examples of these clusters

include the Silicon Valley cluster in California; the information tech-

nology cluster of Bangalore in India; and the Australian and Chilean

wine clusters (Oliver, Lieo, & Cervello, 2017; Pe'er & Keil, 2013; Por-

ter, 2000; Tan, 2006). According to the aforementioned considerable

effects and achievements, clusters have risen to prominence in the

academic community and policymakers (Chen, Zhou, & Xue, 2017;

Morales, Martinez, Verdu, & Chafar, 2015; Tsang & Siu, 2016;

Vanzettine, Corsano, & Montagna, 2017; Wasiluk, 2017).

However, the review of the industrial cluster literature in recent

decades shows that, while numerous studies have examined industrial

clusters in developed countries (Ghauri & Santangelo, 2012; Kamran,

Fan, Matiullah, Ali, & Hali, 2017; Vanzettine et al., 2017), we still lack

research that systematically addresses the dynamic and nature of clus-

ter implementation in developing economies. In fact, the discrepancies

in institutional conditions between the two economies (Lin, Peng,

Yang, & L, 2009; Park & Luo, 2001) indicate that thefull picture of the

idiosyncrasy of how these clusters operate in the developingsetting is

still largely incomplete. Therefore, researchers have called for more

research to investigate the transferabilityof current theories of clusters

to emerging markets and developing countries (see Ghauri &

Santangelo,2012; Vanzettine et al., 2017).This, in turn, emphasizes the

role of localizationand context factors in drivingcluster performance. As

such, focusing on the context can help to diagnose a region's social,

political, and economic conditions (Sultan, 2014) that can facilitate or

complicate the progress of cluster-based industrial development in

developingcountries (Hashino & Otsuka, 2013).

Against this backdrop, we aim to address this gap by identifying

and analyzing contingencies and constraining factors that can influ-

ence industrial cluster success in a developing country. More specifi-

cally, we seek to understand why the clustering approaches

developed in the West are less successful when applied in the East;

setting our main research question as: what are the factors that affect

the success of the carpet industrial cluster in Iran as an example of a

large developing economy?

JEL Classification Code: R11

DOI: 10.1002/jsc.2324

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