Abstract:
Given that clustered firms in developing countries generally sell their goods through multinational firms, we seek to determine under what conditions might clustered surgical instrument firms band together and form a cooperative to “break out” of their relationship with multinational buyers to market their own goods. Our results, based on a survey of surgical instrument producers in Sialkot, Pakistan, demonstrate that firms are more likely to be interested in such initiatives once they have already had some direct experience in marketing, such as selling products under their own brand name and having already sold some goods directly to hospitals. Firms that have had relationships of longer duration with customers tend to be less likely to be interested in joint action initiatives. This indicates that a higher opportunity cost of engaging in joint action (as proxied by relationships of longer duration) reduces the likelihood of cooperative marketing initiatives in clusters
