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Cultural Capital and Industrial Cluster Competitiveness: A Case Study of the Cibaduyut Footwear Cluster

Cultural Capital and Industrial Cluster Competitiveness: A Case Study of the Cibaduyut Footwear Cluster
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Author(s): Asnita Frida Sebayang (Bandung Islamic University, Indonesia), Roel Rutten (Tilburg University, The Netherlands) and Dessy Irawati (eduPRIME Education and Research Consultancy, The Netherlands & Bank Negara Indonesia, Indonesia)
Copyright: 2015
Pages: 19
Source title: Handbook of Research on Global Competitive Advantage through Innovation and Entrepreneurship
Source Author(s)/Editor(s): Luís M. Carmo Farinha (Polytechnic Institute of Castelo Branco & NECE – Research Unit, Portugal), João J. M. Ferreira (University of Beira Interior & NECE – Research Unit, Portugal), Helen Lawton Smith (Birkbeck, University of London & Oxfordshire Economic Observatory, Oxford University, UK) and Sharmistha Bagchi-Sen (State University of New York – Buffalo, Buffalo, NY, USA)
DOI: 10.4018/978-1-4666-8348-8.ch015

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Abstract

This chapter explains how cultural capital affects the competitiveness of Indonesia's Cibaduyut footwear cluster. Cultural capital are norms and values affecting community behaviour that in turn affect cluster innovation, market share, and productivity. Small family businesses with a long tradition of stability and pursuing family interests dominate the cluster. Consequently, despite strong norms and values emphasizing working hard and honesty, (in)formal cluster rules promote self-interest rather than collective action. This results in a non-innovative business-as-usual attitude, hampers collective investments in human resource development and the adoption of new production technologies, leaving the cluster with low productivity and inferior product quality, restricting it to domestic markets. It also leaves the small business vulnerable to large trading companies on which they depend for international market access. The pursuit of low prices rather than quality plays small firms against each other, thus further hampering innovation and restricting the cluster's ability to expand internationally.

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