Petty Traders in a Garment Cluster in Kenya

Abstract

While Chapter 2 explored the impact of overseas Vietnamese traders on the performance of garment enterprises in Northern Vietnam, this chapter provides an in-depth analysis to uncover the role of petty traders in the performance of garment enterprises in Nairobi. As was specified in Hypothesis 2 in Chapter 1, traders are important in the development of industries because they disseminate market information, which tends to be scarce, particularly among a large number of micro and small enterprises (MSEs). Not only do traders provide vital information on products and designs demanded by consumers (Knorringa, 1999), they also introduce new information on improved products and production methods (Hayami and Kawagoe, 1993). Traders are attracted to clusters because the cost of searching and negotiating between traders and producers tends to be low in clusters due to the concentration and competition of a large number of producers in a small area (e.g., Levy, 1991; Sonobe et al., 2002, 2004; Yamamura et al., 2003). Consequently, enterprises located in industrial clusters are generally more market-oriented in terms of inter-enterprise transactions and more profitable than other enterprises.