Clusters and Competitive Advantage The Turkish Experience_8 pdf

176
(Continued)
Province ISIC Industry
Location
Quotient
Erzincan 1310 Mining of iron ores 24.8875
1320 Mining of non-ferrous metal ores, except
uranium and thorium
19.1248
2720 Manufacture of basic precious and non-ferrous
metals
9.0355
1429 Other mining and quarrying n.e.c. 7.2891
6021 Other scheduled passenger land transport 6.9192
Erzurum 1422 Extraction of salt 9.7769
7310 Research on and experimental development
of NSE (Natural Science and Engineering)
8.0999
1020 Mining and agglomeration of lignite 6.5639
9309 Other service activities n.e.c. 5.4203
1543 Manufacture of cocoa, chocolate and sugar
confectionery
2.8477
Eskisehir 2412 Manufacture of fertilizers and nitrogen
compounds
15.6866
1421 Mining of chemical and fertilizer minerals 14.5554
9000 Sewage and refuse disposal, sanitation etc. 12.4919
3330 Manufacture of watches and clocks 12.2847
1410 Quarrying of stone, sand and clay 4.4178
Gaziantep 1722 Manufacture of carpets and rugs 20.1662

2310 Manufacture of coke oven products 11.2129
2424 Manufacture of soap, detergents, perfumes etc. 6.1161
1532 Manufacture of starch and starch products 5.4365
1723 Manufacture of cordage, rope, twine and
netting
4.6398
Giresun 1549 Manufacture of other food products n.e.c. 9.5858
1320 Mining of non-ferrous metal ores, except
uranium and thorium
4.3470
6303 Other supporting transport activities 3.7061
1554 Manufacture of soft drinks; production of
mineral waters
3.2748
6022 Other non-scheduled passenger land transport 3.0346
Gümüshane 2694 Manufacture of cement, lime and plaster 11.3555
1320 Mining of non-ferrous metal ores, except
uranium and thorium
7.0442
1513 Processing and preserving of fruit and vegetables 4.4383
4010 Production, collection and distribution of
electricity
3.0276
5122 Wholesale of food, beverages and tobacco 2.5745
Hakkari 6304 Travel agencies; tourist assistance activities n.e.c. 3.7886
5211 Retail sale in non-specialist stores (food,
beverages or tobacco)
3.6207
4010 Production, collection and distribution of
electricity

3.4425
177
2022 Manufacture of builders’ carpentry and joinery 2.1415
9241 Sporting activities 2.0951
Hatay 9000 Sewage and refuse disposal, sanitation etc. 8.9314
2023 Manufacture of wooden containers 4.9557
1514 Manufacture of vegetable and animal oils and fats 4.3501
2320 Manufacture of refined petroleum products 3.9239
5040 Sale, maintenance and repair of motorcycles 3.1783
Içel 7111 Renting of land transport equipment 28.1535
7495 Packaging activities 9.0340
7123 Renting of office machinery and equipment
(incl. computers)
8.2774
6301 Cargo handling 6.7404
5110 Wholesale on a fee or contractual basis 5.1401
Igdir 1422 Extraction of salt 24.8973
1729 Manufacture of other textiles n.e.c. 17.5432
2429 Manufacture of other chemical products n.e.c. 6.8240
5240 Retail sale of second-hand goods 4.9094
8520 Veterinary activities 3.4114
Isparta 1421 Mining of chemical and fertilizer minerals 31.1074
2926 Manufacture of machinery for textile and leather
production
7.7432
1722 Manufacture of carpets and rugs 7.2111
1911 Tanning and dressing of leather 6.3583
3599 Manufacture of other transport equipment n.e.c. 5.0527
Istanbul 2421 Manufacture of pesticides and other
agrochemical products

3.9830
6210 Scheduled air transport 3.9818
7230 Data processing 3.6333
7413 Market research and public opinion polling 3.5430
3694 Manufacture of games and toys 3.4993
Izmir 1600 Manufacture of tobacco products 13.7714
7122 Renting of construction machinery and
equipment
7.3957
5259 Other non-store retail sales 5.5086
7492 Investigation and security activities 5.4076
1429 Other mining and quarrying n.e.c. 5.1526
Karaman 6022 Other non-scheduled passenger land transport 5.6724
5121 Wholesale of agricultural raw materials and live
animals
4.8861
5040 Sale, maintenance and repair of motorcycles etc. 4.1601
1020 Mining and agglomeration of lignite 3.9928
8520 Veterinary activities 3.8784
Kars 2429 Manufacture of other chemical products n.e.c. 7.7788
1422 Extraction of salt 7.4759
2699 Manufacture of other non-metallic mineral
products n.e.c.
6.4409
7130 Renting of personal and household goods n.e.c. 5.2590
4010 Production, collection and distribution
of electricity
4.5875
178
(Continued)

Province ISIC Industry
Location
Quotient
Kastamonu 1320 Mining of non-ferrous metal ores, except
uranium and thorium
17.2279
1512 Processing and preserving of fish and fish products 16.3051
2692 Manufacture of refractory ceramic products 9.1138
2022 Manufacture of builders’ carpentry and joinery 3.9766
2021 Manufacture of veneer sheets, plywood,
laminated board etc.
3.3318
Kayseri 1542 Manufacture of sugar 25.1365
1310 Mining of iron ores 13.8427
1532 Manufacture of starch and starch products 10.2831
9000 Sewage and refuse disposal, sanitation etc. 6.1036
1722 Manufacture of carpets and rugs 5.1696
Kirklareli 6592 Other credit granting 18.1451
1110 Extraction of crude petroleum and natural gas 10.6959
3599 Manufacture of other transport equipment n.e.c. 8.9950
7422 Technical testing and analysis 7.5713
3140 Manufacture of accumulators, primary cells and
batteries
5.7115
Kirikkale 2310 Manufacture of coke oven products 29.2998
2320 Manufacture of refined petroleum products 21.3521
1511 Production, processing and preserving
of meat etc.
11.1442
2423 Manufacture of pharmaceuticals, medicinal

chemicals etc.
6.9761
2694 Manufacture of cement, lime and plaster 3.9358
Kirsehir 1552 Manufacture of wines 19.4470
1410 Quarrying of stone, sand and clay 4.5353
2921 Manufacture of agricultural and forestry machinery 3.9829
6601 Life insurance 3.5064
1531 Manufacture of grain mill products 3.4330
K. Maras 3591 Manufacture of motorcycles 11.9977
2692 Manufacture of refractory ceramic products 9.2978
2720 Manufacture of basic precious and non-ferrous
metals
9.0733
2320 Manufacture of refined petroleum products 7.0529
1020 Mining and agglomeration of lignite 6.7194
Kocaeli 2412 Manufacture of fertilizers and nitrogen compounds 24.3247
1532 Manufacture of starch and starch products 8.2925
7320 Research on and experimental development
of SSH (Social Sciences and Humanities)
6.2371
6022 Other non-scheduled passenger land transport 5.0692
6120 Inland water transport 4.7422
Konya 2927 Manufacture of weapons and ammunition 29.2171
1543 Manufacture of cocoa, chocolate and sugar
confectionery
5.9826
179
3591 Manufacture of motorcycles 5.8347
1533 Manufacture of prepared animal feeds 4.8738
2921 Manufacture of agricultural and forestry machinery 4.8716

Kütahya 1020 Mining and agglomeration of lignite 28.3098
1429 Other mining and quarrying n.e.c. 18.4535
1421 Mining of chemical and fertilizer minerals 12.5454
2691 Manufacture of non-structural, non-refractory
ceramic ware
8.0114
1320 Mining of non-ferrous metal ores, except
uranium and thorium
7.3370
Malatya 5251 Retail sale via mail order 8.1850
7310 Research on and experimental development
of NSE
7.4615
8520 Veterinary activities 5.2587
7493 Building cleaning activities 4.8635
7123 Renting of office machinery and equipment
(incl. computers)
4.6570
Manisa 2692 Manufacture of refractory ceramic products 9.7505
4550 Renting of construction equipment with operator 9.3036
1020 Mining and agglomeration of lignite 6.6896
1542 Manufacture of sugar 6.6454
3312 Manufacture of instruments for measuring,
testing etc.
6.6454
Mardin 1421 Mining of chemical and fertilizer minerals 24.4693
1110 Extraction of crude petroleum and natural gas 8.3912
2694 Manufacture of cement, lime and plaster 4.0050
1531 Manufacture of grain mill products 3.1403
6021 Other scheduled passenger land transport 2.6008

Mugla 3512 Building and repair of pleasure and sporting
boats
11.8470
1429 Other mining and quarrying n.e.c. 8.1659
5510 Hotels and other providers of short-stay
accommodation
7.2328
1020 Mining and agglomeration of lignite 5.9185
3320 Manufacture of optical instruments,
photographic equipment
5.2021
Mus 6302 Storage and warehousing 14.0483
3691 Manufacture of jewellery and related articles 5.2435
5211 Retail sale in non-specialist stores (food,
beverages or tobacco)
3.2656
1531 Manufacture of grain mill products 2.8777
3130 Manufacture of insulated wire and cable 2.8525
Nevsehir 1552 Manufacture of wines 59.3168
2691 Manufacture of non-structural, non-refractory
ceramic ware
14.3179
3420 Manufacture of bodies for motor vehicles etc. 9.8496
2692 Manufacture of refractory ceramic products 9.5661
2699 Manufacture of other non-metallic mineral
products n.e.c.
7.1356
180
(Continued)
Province ISIC Industry

Location
Quotient
Nigde 1429 Other mining and quarrying n.e.c. 20.9229
1911 Tanning and dressing of leather 12.7957
2695 Manufacture of articles of concrete, cement and
plaster
4.3250
7310 Research on and experimental development
of NSE
4.2482
1721 Manufacture of made-up textile articles, except
clothing
3.4642
Ordu 1549 Manufacture of other food products n.e.c. 4.2547
3511 Building and repair of ships 3.5830
1410 Quarrying of stone, sand and clay 3.3016
1541 Manufacture of bakery products 2.5008
2413 Manufacture of plastics in primary form 2.3887
Rize 1549 Manufacture of other food products n.e.c. 9.4490
2925 Manufacture of machinery for food and tobacco
processing
6.0872
9211 Motion picture and video production and
distribution
3.3329
9241 Sporting activities 2.8142
1410 Quarrying of stone, sand and clay 2.1821
Sakarya 1532 Manufacture of starch and starch products 23.8513
3699 Other manufacturing n.e.c. 6.8228
2430 Manufacture of man-made fibres 5.7875

2029 Manufacture of other products of wood, etc. 5.0208
3591 Manufacture of motorcycles 3.2525
Samsun 7123 Renting of office machinery and equipment
(incl. computers)
6.0494
2411 Manufacture of basic chemicals (excl. fertilizers
and nitrogen
3.9064
6022 Other non-scheduled passenger land transport 3.5411
2021 Manufacture of veneer sheets, plywood,
laminated board etc.
3.3608
3720 Recycling of non-metal waste and scrap 2.8387
Siirt 1110 Extraction of crude petroleum and natural gas 56.0627
2411 Manufacture of basic chemicals, excl. fertilizers
and nitrogen
7.0898
6022 Other non-scheduled passenger land transport 7.0156
9220 News agency activities 4.4111
4010 Production, collection and distribution of
electricity
2.7454
Sinop 1512 Processing and preserving of fish and fish
products
78.9327
2692 Manufacture of refractory ceramic products 30.5443
2693 Manufacture of non-refractory clay and ceramic
products
4.6182
181

3512 Building and repair of pleasure and sporting boats 4.3992
6303 Other supporting transport activities 4.2412
Sirnak 1030 Extraction and agglomeration of peat 777.4033
5211 Retail sale in non-specialist stores (food,
beverages or tobacco)
3.0584
2010 Saw milling and planing of wood 2.8856
6303 Other transport-supporting activities 2.4512
6719 Activities auxiliary to financial intermediation
n.e.c.
2.2447
Sivas 1310 Mining of iron ores 49.4867
1422 Extraction of salt 9.2920
1554 Manufacture of soft drinks; production
of mineral waters
4.2911
9220 News agency activities 3.6291
4010 Production, collection and distribution
of electricity
3.1514
Tekirdag 1552 Manufacture of wines 25.8270
6592 Other credit granting 12.2284
3720 Recycling of non-metal waste and scrap 9.1812
2921 Manufacture of agricultural and forestry
machinery
6.6159
1520 Manufacture of dairy products 4.1556
Tokat 2692 Manufacture of refractory ceramic products 16.3351
1552 Manufacture of wines 10.8813
3599 Manufacture of other transport equipment n.e.c. 9.2227

1723 Manufacture of cordage, rope, twine and netting 7.4418
1533 Manufacture of prepared animal feeds 7.0354
Trabzon 3511 Building and repair of ships 11.5556
1512 Processing and preserving of fish and fish
products
11.3632
1549 Manufacture of other food products n.e.c. 6.3960
6420 Telecommunications 4.5488
1721 Manufacture of made-up textile articles, except
clothing
2.1843
Tunceli 1422 Extraction of salt 10.4205
7250 Maintenance and repair of office and accounting
machinery
5.5124
4010 Production, collection and distribution of
electricity
4.5307
7414 Business and management consultancy
activities
4.3337
1729 Manufacture of other textiles n.e.c. 3.3449
S. Urfa 5110 Wholesale on a fee or contractual basis 7.0048
1541 Manufacture of bakery products 4.7122
7123 Renting of office machinery and equipment
(incl. computers)
4.2859
5240 Retail sale of second-hand goods 4.1156
1554 Manufacture of soft drinks; production of
mineral waters

3.5961
182
(Continued)
Province ISIC Industry
Location
Quotient
Usak 2430 Manufacture of man-made fibres 88.2922
1911 Tanning and dressing of leather 37.5450
1711 Preparation and spinning of textile fibres; weaving
of textiles
25.3057
1722 Manufacture of carpets and rugs 12.4834
1712 Finishing of textiles 8.7605
Van 5190 Other wholesale 94.9212
2213 Publishing of recorded media 32.9473
5240 Retail sale of second-hand goods 30.4632
8010 Primary education 27.9796
5121 Wholesale of agricultural raw materials and live
animals
10.6603
Yozgat 5259 Other non-store retail sale’ 10.6453
1320 Mining of non-ferrous metal ores, except
uranium and thorium
7.3305
1531 Manufacture of grain mill products 5.1166
2921 Manufacture of agricultural and forestry machinery 2.9186
1020 Mining and agglomeration of lignite 2.6102
Zonguldak 1010 Mining and agglomeration of hard coal 43.6150
6301 Cargo handling 6.9926
5251 Retail sale via mail order 3.9650

2923 Manufacture of machinery for metallurgy 3.2441
7493 Building cleaning activities 2.6490
183
Appendix 2 A Brief Description of
Fuzzy-Set Analysis
When applying the technique that Ragin (2000) introduces in his book Fuzzy-Set
Social Science, the first task is to assess the degree of fuzzy membership for each of the
variables included in the analysis. Theoretical knowledge guides the identification
of the maximum (fuzzy membership score 1) and minimum (fuzzy membership
score 0) scores as well as the boundaries of the categories in between. Amongst the
latter the ‘crossover point’ (that is, the raw score corresponding to 0.5 in terms of the
fuzzy membership score) is of special importance, since scores of less than 0.5 but
greater than 0 represent objects that are more out of the set than in it, and vice versa.
As in the case of crisp sets of Boolean algebra, fuzzy sets can be negated. Predictably,
in the former negation switches membership scores from 1 to 0 and from 0 to 1,
whereas in the latter the membership of a case in the negation of fuzzy set A is
calculated by subtracting its membership in set A from 1. In similar vein, it is possible
to calculate ‘logical AND’ and ‘logical OR’ with fuzzy sets. Specifically, logical AND is
calculated by taking the minimum whereas logical OR is calculated by taking the
maximum of each case in the sets that are intersected.
The general principle regarding the ‘necessary conditions’, which are of vital
importance in the method developed, holds both for crisp and fuzzy sets: whenever
a causal condition is necessary for an outcome, instances of the outcome will form
a subset of instances of the causal condition. Arithmetically this translates into the
following: set A is a subset of set B if the membership scores of cases in set A are less
than or equal to their respective membership scores in set B. In other words, to
demonstrate necessity the researcher must show that the outcome is a subset of the
cause. The application of the subset principle when assessing the ‘sufficient conditions’,
on the other hand, requires the researcher to show that the cause is a subset of the
outcome, again by applying the arithmetic relationship ‘less than or equal to’.

Finally, Ragin (2000) suggests that probabilistic criteria can be used in a fuzzy set
analysis to assess necessity and sufficiency. Thus it is possible to introduce new concepts
that imply, for instance, quasi-sufficiency of causal conditions using linguistic qualifiers
(benchmarks) such as ‘more often than not’, ‘usually’ and ‘almost always’. It is then
possible to use the conventional statistical analysis for proportions to assess whether
the observed rate is significantly greater than the benchmark, using probabilistic
criteria.
184
Notes and References
1 Introduction: A Background to Clusters
1. It is certainly not the aim here to provide full coverage of the extensive literature
on the many aspects of clustering. The works cited in the following pages should
therefore be considered as just some examples of the major contributions that have
aided our understanding of the subject.
2. Examples of ground-breaking books in the new genre are Harvey’s The Limits of
Capital (1982), Massey’s Spatial Division of Labor (1984) and Smith’s Uneven Development
(1984).
3. The collapse of the socialist bloc cast some doubt on the credibility of Marxist
theory and its application to economic geography. Neo-Marxist works nonetheless
continue to be an influential part of the economic geography literature (Bryson
et al., 1999).
4. Different studies focus on different dimensions of urbanization, including increasing
returns, services, infrastructure and access to inputs and markets. Here we shall
concentrate on the most relevant studies for our purposes: those which distinguish
urbanization from localization.
5. See, among others, Henderson (1988, 2000), Sveikauskas et al. (1988) and Nakamura
(1985).
6. Since it is impossible to express these factors mathematically, Krugman (1995)
thinks that they are best left to sociologists. In his view there is no alternative to
models, and all thinking involves implicit modelling. However it should be borne

in mind that models are merely metaphors that enable us to understand certain
aspects of reality, rather than portraying the reality itself. Economic geographers,
on the other hand, think that the factors that are omitted from formal models play
a key role in determining the spatial agglomeration of economic activity (Martin,
1999).
7. The examples in this section have been chosen from more recent studies. Of course
there are many older studies of the geographic concentration of individual indus-
tries that provide detailed information on and insights into the emergence and
development of clusters. Two classic examples are those of the US shoe and leather
industries (Hoover, 1937) and the US aircraft industry (Cunningham, 1951).
8. The products in question are dyes (Basel in Switzerland), pharmaceuticals (Basel,
New York and New Jersey), packing and filling machinery (Bologna in Italy),
continuous synthetic fibres (Fukui, Ishikawa and Toyama in Japan), musical
instruments (Hamamatsu in Japan), ceramic tiles (Sassuolo in Italy); Scotch whisky
(Scotland), factory automation equipment (Turin, Milan and Piacenza in Italy),
motion pictures (Hollywood), optics (Oberkochen and Wetzlar in Germany),
cutlery (Solingen in Germany), woollen textiles (Prato in Italy) and watches
(Geneva and Jura in Switzerland). Enright (1990) also includes shorter abstracts of
other case studies in the appendix: freight forwarding (Basel in Switzerland), stone and
stonework (Carrara in Italy), aerospace (Los Angeles), ski boots (Montebelluna in Italy),
pens and pencils (Nuremberg in Germany), media (Munich in Germany), carbon
fibres (Osaka in Japan), footwear (Pusan in South Korea), electronics (Silicon Valley
in the United States) and textile machinery (Zurich and St Gallen in Switzerland).
Notes and References 185
9. For example in her analysis of districts in Tuscany – including Empoli (clothing),
Santa Croce (leather tanning), Prato (textiles), Poggibonsi (furniture), Monsummano
(footwear), Carrara (marble and building stone) and Arezzo (jewellery) – Dei
Ottati (1996) focuses on changes in the competitive context and the strategies
adopted by local firms, and concludes that a transformation occurred with respect
to strategies for product diversification, innovation and quality upgrading.

Crestanello (1996) is also optimistic about the continuing success of the clusters in
Veneto and Tuscany, as are Brusco et al. (1996), who argue that the ongoing success
of the clusters in Emilia-Romagna has shown that competitiveness is not rendered
invalid by high labour costs. Becattini (1990), on the other hand, points to some
signs that Italian clusters have found it difficult to adjust to fluctuations in external
conditions, particularly the growth of unemployment.
10. The distinguishing feature of the clusters in South Korea, which is classified as
a newly industrialized country, is that small and medium-sized enterprises are
hierarchically networked and spatially clustered around large enterprises and
industrial conglomerates (chaebols) (Nadvi, 1994).
11. In his 1990 study Porter writes of clusters as groups of related industries, regardless
of geographical location, and stresses that such clusters tend to be localized in
space. Thus a distinction should be made between how Porter uses the term cluster
in his 1990 study (closer to networks) and in his 1998 study (geographic clusters).
See Chapter 2 for a discussion of this issue.
12. For more on defining clusters see the methodology section in Chapter 3, which
discusses the scope and boundaries of clusters.
13. This in turn means that old Fordist regions have undergone a major restructuring,
which can be interpreted as a Schumpeterian process of localized creative destruc-
tion. The consequences of this have been serious enough to cause a ‘second industrial
divide’, according to Piore and Sabel (1984), who claim that flexible specialization is
a reaction to the ‘crisis of Fordism’ and can be considered as a partial return to more
craft-based modes of production, where there is ‘cooperative competition’ among
smaller firms, greater reliance on social relationships (particularly trust) as a means of
organizing transactions, and flexible manufacturing equipment and techniques.
14. The two perspectives covered in this section have parallels with the overall
approach in the management literature.
15. Krugman’s (1991a) colourful account of the emergence and development of the
carpet industry in Dalton is just one of many interesting examples that point to
the importance of historical accident in the initiation of a cluster.

16. This also points to the necessity of making a distinction between business and
social networks, whose relative importance might result in different kinds of cluster
(McDonald and Vertova, 2002).
2 Clusters in the Management Literature
1. With regard to the latter, McCann and Fingleton (1996) found tighter linkages
following the adoption of just-in-time production by a small sample of Scottish
electronic firms.
2. Relatedly, Parkin (1999) presents a game theoretic model that demonstrates that
interfirm cooperation is best fostered by repeated contact, which is in turn reinforced
by geographic proximity.
3. The temporary loss of custom that Swiss watch producers suffered as a result of
the new technology introduced by Japanese companies is an interesting example
in this respect.
186 Notes and References
4. A likely explanation of such concentration is that other areas lack the necessary
infrastructure, institutions and suppliers. Remedying this would be inefficient and
costly, so concentration in a number of metropolitan areas is preferred, according
to Porter (1998). Germany, Italy, Switzerland and the United States provide good
examples in this respect.
5. See Öz (1999), Davies and Ellis (2000) and Konsolas (2002) for comprehensive
reviews of this debate.
6. Specifically, cluster charts were prepared for the years 1980, 1985 and 1990; clusters
were classified as ‘strong’, ‘fairly strong’, ‘potential’ or ‘latent’; and since Porter’s
methods laid too little emphasis on international aspects in the case of a small
open economy, ‘international business activities’ was added as a third outside
force (Rouvinen and Yla-Anttila, 1999).
7. Padmore and Gibson (1998) view the branches of firms operating outside the target
region as important sources of technology and skills.
8. The case of Ireland is relevant in this regard in that the substantial increase in
FDI has been instrumental in the noteworthy growth achieved by the country in

recent years.
9. For example some firms (both foreign and American) choose to establish a presence
in Silicon Valley in order to keep up with the latest developments in the industry.
10. Porter (1996, p. 89) poses the related research question of why smaller countries,
such as Austria, Chile, Denmark, Hong Kong and Singapore, and large countries
where much policy is made at the state level, such as Germany and the United
States, seem to have economic advantages over other large countries.
11. An entire issue of the Review of Black Political Economy was dedicated to this
debate.
3 Industrial Clusters in Turkey
1. The house building sector of this industry is linked to the competitive housing/
household goods cluster.
2. The mathematical expression for the LQ is LQ (X
ik
/X
k
)/(Y
i
/Y), where X
ik
is
employment in sector i in region k, X
k
is total employment in the region, Y
i
is
national employment in sector i and Y is total national employment. If the value
of this ratio is greater than one, the region’s share of the activity in question is
greater than the national average, which indicates the existence of spatial concen-
tration (Üser, 1983).

3. Indices that measure the geographic concentration of establishments – C4EST
and C8EST – are also used by Enright (1990).
4. According to their results, agglomeration forces appear to have a stronger effect at
the four-digit industry level (Maurel and Sedillot, 1999).
5. It should be remembered that in this study clusters are not necessarily restricted
to small firm agglomerations, as discussed in Chapter 1.
6. The related and supporting industries of a four-digit industry, as well as other
clusters and institutions that are linked to it, are examined separately for each
case study in the following chapters.
7. A review of the literature reveals that not many studies have focused specifically
on the overall spatial patterns of Turkish industry. Üser’s (1983) dissertation
and Eraydin’s (1997, 2002a, 2002b) works are notable exceptions. For a recent
contribution see Akgüngör (2003).
8. All the necessary data are available for the year 1992 and have been obtained
from the State Institute of Statistics.
Notes and References 187
9. The list obtained by using the C8EMP indices is very similar to that obtained from
the C4EMP indices, and hence is not reported here.
10. The Istanbul metropolitan area consists of Istanbul, Kocaeli, Sakarya, Tekirdag
and Bursa, the Izmir metropolitan area of Izmir, Manisa, Aydin and Denizli, the
Adana metropolitan area of Adana, Mersin and Hatay, and the Ankara metropolitan
area of Ankara and Kirikkale. The Regional centres are Kayseri, Gaziantep, Konya,
Samsun and Eskisehir (Eraydin, 2002a).
11. The conclusions are the same if these groups are treated as proportions and the
standard statistical techniques are applied.
12. See Appendix 2 for a brief description of this method.
13. With regard to ‘suspect cases’, the category ‘other textile products’, for instance,
might refer to different types of item in the SITC and ISIC systems.
14. Following Ragin (2000), a benchmark proportion of 0.80 is used to represent the
linguistic qualifiers ‘almost always necessary’ and ‘almost always sufficient’, and

a benchmark proportion of 0.65 is used to represent the linguistic qualifiers ‘usually
necessary’ and ‘usually sufficient’.
15. In recent years, considerable attention has been paid to the relationship between
geographic concentration and trade, and an extensive body of literature has
emerged to address various aspects of the issue (see for example Ellison and
Glaeser, 1999; Krugman, 1991a; Maurel and Sedillot, 1999; Midelfart-Knarvik et al.,
2000). Jaffe et al. (1993, p. 578) compare the geographic location of patent citations
with that of the cited patents, and conclude that ‘paper trails’ left by knowledge
spillovers in the form of citations are indeed geographically concentrated.
16. Schmitz (1999) has used a survey to investigate whether enterprises in the export-
oriented Sinos Valley in Brazil have stepped up their cooperation in response to
intensified global competition in leather footwear.
17. In the second part of his study on geographic concentration, Enright (1990)
conducted qualitative case studies to investigate the possible contribution of
clustering to international competitiveness. Roelandt et al. (1999) have combined
quantitative and qualitative methods by using monographic case studies and
input – output tables. Similarly Ziona (2000) argues for the use of quantitative
techniques to identify clusters, and qualitative techniques to analyse them.
18. In terms of methodology the present study resembles Enright’s (1990) approach.
19. A cluster map is a graphic way of portraying the various components of a cluster
and identifying how they relate to each other. This study follows Porter’s (1998,
2000) approach, which first identifies the main product categories and then the
links between inputs and products in these categories. The map also portrays the
relations between producers and their supporting government agencies, universities,
research centres and trade associations. Other clusters that are linked to the cluster
in question are included as well. Porter’s cluster diagram therefore maps not only
the input – output structure but also the local infrastructure that supports the
cluster and its relations with other clusters. For a discussion of alternative cluster
mapping techniques see Ziona (2000).
4 The Furniture Cluster in Ankara

1. The limited degree of international trade by cluster firms is manifest in the general
lack of cooperative relations with foreign companies, although there are exceptions,
such as in Casa and Balikçioglu.
2. It is interesting to note that construction is one of the activities with which Turkish
entrepreneurs have often begun their commercial activities. It was Ankara in the
188 Notes and References
1920s that one of the most prominent figures in Turkish business history – Vehbi
Koç, a small grocery store owner – changed his fortune by becoming active in the
government’s project to reconstruct the city (Öz, 1999). Koç was at the right place
at the right time and made good use of Ankara’s emergence as the capital of the
newly established republic (Bugra, 1994), which also provided unique opportunities
for many other businessmen.
3. Interestingly the Turkish government did not attempt to encourage the development
of industry in Ankara at the time, given that the city was booming anyway. The
First Five Year Industrialization Plan (1934–38) did not envisage that any of the
18 planned factories would be located in Ankara. Another industry that emerged
in Ankara in the early republican era was defence, which was established next to
the railway and eventually spread over an area from the railway station in the
west to Kirikkale in the east (Tekeli, 1994, p. 177).
4. An industrial census conducted in Ankara in 1968–69 showed that Siteler’s share
of furniture making in the city was more than 70 per cent (Tekeli, 1994).
5. Although the survey was conducted in the early 1990s, we have little reason to
believe that there has been a dramatic change in this regard.
6. The Department of Wood Product Industrial Engineering at Hacettepe University
and the Department of Furniture and Decoration at Gazi University are
amongst the most noteworthy. METU and the Bilkent University of Ankara
also have well-developed departments of industrial engineering and industrial
design.
7. Some workshops only produce semifinished furniture (so-called ‘furniture in the
rough’) and sell them to other firms for further processing. Most of these workshops

are located on Eregli Street in Siteler.
8. Under Turkish regulations, 10 or more SMEs (firms employing up to 200 workers)
in the same or very closely related sectors can come together to form a sectoral
foreign trade organization. The benefits of this are manifold, including credit on
favourable terms, tax rebates, and financial support for fairs, R&D, waste
management and market research (OAIB and KOSGEB, 1996).
9. It is the policy of KOSGEB to locate its branches in places where there is a concen-
tration of industrial activity. This makes it easier to communicate with firms,
whose managers can visit the centre with the minimum expenditure of time and
resources. The services provided by KOSGEB include short training programmes
and financial contributions to travel expenses for firms that participate in inter-
national furniture fairs.
10. IGEME serves as an export promotion centre for many industries, one of which is
the furniture industry. Information dissemination (especially on potential export
markets) and encouraging Turkish firms to enter international markets (for
instance by supporting their participation in international fairs) are amongst the
key functions of the organization. A similar role is played by the regional export
union, the OAIB.
11. When MNG constructed the Topkapi Hotel in Antalya, for instance, most of the
furniture was imported from Ankara.
12. Some firms have installed lifts to ease this problem.
13. For instance Eczacibasi has entered the sector via a joint venture with the German
kitchen producer Bulthaup, and Koç under license by Alno.
14. Although the lack of original design is clearly one of the major problems of the
cluster firms, the Turkish furniture industry is one of the few industries where the
employment of designers is high in relative terms (Er, 1994).
Notes and References 189
5 The Towel and Bathrobe Cluster in Denizli
1. The towel and bathrobe industry is represented in different SITC categories,
including SITC 65212 (cotton terry towels etc.), SITC 65213 (other cotton terry

towelling etc.), SITC 65496 (terry fabrics other than cotton), SITC 84169 (other
male underwear etc., not knitted), SITC 84289 (other female underwear etc., not
knitted), SITC 84389 (other male underwear etc., knitted), SITC 84489 (other
female underwear etc., knitted). While interpreting the comparisons in this para-
graph, it should be taken into consideration that the latter four categories include
bathrobes and some other related products.
2. There are a small number of very large and successful towel and bathrobe producers
(such as Yesim Tekstil and Özdilek) in Bursa, while Denizli hosts a large number
of smaller firms.
3. In 1946 the towns that hosted most of these cooperatives were Babadag
(1803), Buldan (1317), Kizilcabölük (1149) and Denizli itself (634) (Mutluer,
1995). An interesting example was the establishment of a textile firm in 1954
by 50 individuals from Babadag. Many of the founders of this firm later
became the founder-managers of today’s leading textile firms in Denizli
(Erendil, 1998).
4. The development plan for the 1960s and 1970s put specific emphasis on
regional development. Denizli was included in the scheme from 1973–81.
The policies adopted in accordance with the scheme involved channelling
public investment to the regions and providing incentives for private sector
investment.
5. Denizli ranked seventh amongst the Turkish provinces with citizens employed as
guest workers abroad. Although some of the enterprises established by these
workers failed to survive and only one of the surviving ones is textile-related, the
guest workers’ remittances brought dynamism to various areas of the Denizli
economy in the 1970s.
6. Until 1994, the year in which the Aegean Garment Producers’ Association
commenced its operations, Yasar Holding was the major trading company in
Denizli (Erendil, 1998).
7. Here the term ‘regional economy’ includes Denizli, Isparta, Burdur, Afyon,
Konya, Antalya, Aydin, Izmir, Usak, Manisa and Mugla.

8. In 1992 Pamukkale University was established to further Denizli’s social and
economic development. Previously, the facilities located in Denizli were
affiliated with Dokuz Eylül University in Izmir. The university has a textile
engineering department as well as fashion/design-related occupational schools.
9. This is in line with Bugra’s (1994) findings for larger family businesses in Turkey.
10. Ironically it is Denizli, and not the neighbouring province of Aydin, that has
established a presence in the wine industry.
11. Research suggests that the younger generation tends to put more value on status
symbols (Eroglu, 1998).
12. Those cluster firms which do engage in R&D activities make use of private
institutions (53 per cent), their own R&D units (30 per cent), KOSGEB (12 per cent),
universities (12 per cent) and chambers of commerce or industry (6 per cent) to
carry out these activities (Temel et al., 2002).
13. Their interest in international fairs in particular is strong. Denizli firms were
amongst the first to attend such fairs and continue to be one of the largest groups
from Turkey at the annual Heimtex fair in Frankfurt, Germany.
190 Notes and References
14. In recent years about 200 Denizli firms a year have made use of Eximbank credits,
amounting to $100 million. The credits are mostly short-term (six-month) loans
(TBMM, 2001a).
15. One hundred and ninety- four textile-related firms in Denizli made use of the
incentives between 1980 and 1993 (Sahin, 1997). The number of grants provided
between 1990 and 1997 to Denizli firms reached 907, 67 per cent of which went
to textile firms, mostly for modernization-related investment. Most of these
incentives were granted in 1995, which can be associated with the high expectations
of Turkey’s customs union with the EU (IAV, 1997).
16. However one interviewee disputed the claim that Denizli contributed a lot to
state revenues but received little in return. According to him, this claim was based
on the fact that Denizli’s share of public investment was only low in comparison
with that received by the nearby provinces of Aydin and Isparta, which attracted

higher shares for political reasons.
17. A similar tendency prevailed in other textile towns in Denizli province; that is,
Buldan and Tavas.
18. At the age of 15 one prominent Babadag entrepreneur, Ahmet Nazif Zorlu, first
moved to Trabzon, where he became involved in commercial activities, and then
to Bursa, where he established a textile firm with his brother. The firm currently
holds a strong position in household textile items, particularly bedclothes and
curtains. Apart from its textile investments in the Thrace and Aegean regions, the
firm has entered into the consumer electronics sector by acquiring Vestel.
19. There are also ‘non-textile towns’ in Denizli province. First, Yesilyuva (Acipayam-
Denizli) is the centre of the Turkish footwear industry, accounting for almost
80 per cent of total domestic production. The beginnings of this date back to the
middle ages (Akaydin and Ay, 1998), when a master craftsman called Ahi Kaysar
taught the craft to the residents of the town. The shoemakers prospered remarkably
over the centuries, and by the 1970s their only rival was the Beykoz Sümerbank
shoe factory in Istanbul. Today there are more than 500 workshops, many located
in the basements of residential buildings (echoing Italy). The products are mostly
aimed at middle- and lower-middle-class, price-sensitive customers.
Second, Yatagan is the centre of the cutlery industry. The beginnings of cutlery
production in Yatagan go back to the Seljuks; specifically to one of Sultan Keykubat’s
commanders, Osman Bey, who is believed to have initiated the venture. In the
Ottoman era Abdi Bey, who was equipped with the technical details of cutlery
production, went to Yatagan and contributed to the further development of the
business in the region. Currently there are numerous manufacturers and two
important cutlery-related organizations: a cooperative and a marketing firm called
Yabeltas. The 85 partners in Yabeltas are mostly Yatagan-born guest workers in
Germany. Yatagan cutlery is exported to the Middle East, the CIS, Eastern Europe
and Italy. There are also informal exports via small traders, mostly from Russia.
The town holds a particularly strong position in two products: stainless steel
knives and special scissors for trimming wool. There are also producers specializing

in wooden and plastic handles for knives, and in tools and machines used in
different stages of cutlery production. The industry is now in transition from
home/workshop production to small factory production. The aim is to outcompete
the cutlery cluster in Solingen, Germany.
Finally, the stoneware/earthenware industry is another important economic
activity in Denizli with deep historical roots. The ancient city of Hierapolis was
surrounded by small marble carving units – a primitive cluster called ‘Marble
Notes and References 191
Hierapolis’. Today there are 10 marble and two glass production plants in Denizli
that use state-of-the-art technology and export their products to many countries
around the world. The city also hosts five cement and four brick factories
(TC Denizli Valiligi, 1998).
20. One of the leading cluster firms, Küçüker, reported that towel production in this
firm began in 1975 and exports of towels in 1979.
21. Middlemen, especially yarn merchants, have good contacts with key suppliers in
Denizli and elsewhere. One particular veteran yarn merchant from Denizli, for
example, has well-established relations in Sultanhamam (Istanbul), which is
viewed as the heart of the yarn market. Such contacts help to secure a competitive
price for good-quality yarn as well as timely delivery. Many of the cluster firms
employ ‘merchandise managers’, who act as contacts between the firm and its
customers. For instance they follow up orders on behalf of customers, and in this
regard they work like outsiders with respect to the firm.
22. In fact Sümerbank and some privately owned cluster firms such as Küçüker have
functioned as schools in that some of their employees later became founders of
new firms in the cluster.
23. The question that arises here is how many firms will be required to try to build up
a brand in order to produce about six successful brands.
24. Given that many of the cluster firms are engaged in subcontracting relations with
other firms in Denizli, it is likely that most of the evolving brands will in fact
represent one or more networks.

25. It has been argued that the high degree of specialization is related to the fact that
Denizli lies within the periphery of the Izmir metropolitan area (Temel et al.,
2002).
6 The Carpet Cluster in Gaziantep
1. The principal markets for Turkish hand-woven carpets are Germany, the United
States, Japan and Switzerland (ITC, 2002).
2. The eight so-called ‘Konya carpets’, which are amongst the oldest knotted carpets
found to date, hold a prominent position in art history and have been described
as ‘the most famous carpets of the world’ (Erdmann, 1964, p. 93). Apart from the
Konya carpets, Anatolian carpets with figures of animals (birds in particular) were
also well known during the early periods. These were probably produced in western
Anatolia, possibly in Bergama and Usak.
3. One type of Anatolian carpet was even called ‘Holbein carpet’ because it appeared
so often in that artist’s paintings.
4. Carpet exports from Izmir went by sea to Venice.
5. A significant proportion of exported carpets were shipped from Izmir, which was
once known as Smyrna, and in some countries ‘Smyrna rugs’ became synonymous
with Turkish carpets (Con, 1966). Most of these went to Britain, either for
domestic sale or re-export (Quataert, 1986).
6. The firm set up 17 rug workshops in various locales in Western and Central Anatolia
and owned three yarn factories – two in Izmir and one in Bandirma. The yarn
that was spun and dyed at these factories was distributed to affiliated workshops
in major rug-weaving centres such as Izmir, Sivas, Burdur, Isparta and Kahraman-
maras. In the remaining centres, which eventually numbered 14, the firm chose
to establish only agencies (Küçükerman, 1987).
7. In 1957 Gaziantep accounted for 5.4 per cent of the total yarn production in Turkey
(Türkiye Ticaret Odalari, Sanayi Odalari ve Ticaret Borsalari Birligi, 1959, p. 21).
192 Notes and References
8. The regional economy consists of Gaziantep, Diyarbakir, Mardin, Urfa, Adiyaman,
Elazig, Kilis, Bitlis, Van, Adana, Hatay and Içel.

9. In relative terms, however, problems related to demand, competition and uncer-
tainty outweigh the difficulties with finance (Acar, 2002).
10. In fact there is only one firm with a different structure. This is owned by an American
of Persian origin.
11. The machinery cluster is located in Örnek Sanayi Sitesi.
12. The Isparta factory produced yarn used in carpet weaving and subcontracted carpet
production to independent weavers. The Hereke factory, which had been producing
carpets since 1891, had a production workshop, a dye preparation unit and a design
unit, and organized training courses for those interested in learning to weave.
Production in these factories, however, was limited. For example in 1958, of the
1488929 square metres of carpet produced in Turkey that year, only 27473 square
metres came from these two factories (Türkiye Ticaret Odalari, Sanayi Odalari ve
Ticaret Borsalari Birligi, 1959, p. 67).
13. The government has organized such courses – including in prisons – since the 1940s.
Upon completion of the courses, looms are presented to successful students.
14. Hand-woven and machine-woven carpets are not perfect substitutes. For instance
Germany, the leading importer of hand-woven carpets, has a very well developed
machine-woven carpet industry. Promoting hand-woven Turkish carpets and
traditional Turkish motifs in the world market is likely to have a positive
spillover effect on the machine-woven carpet sector. Similarly, supporting original
contemporary designs developed by rural carpet weavers can keep the latter in
business and aid the work of professional artists specializing in carpet design.
15. The project includes the eventual construction of 21 dams and 17 power plants,
which will contribute immensely to the development of agricultural activities in
the region and help to solve Turkey’s energy problems.
16. It is estimated that wheat and cotton will together account for about 50 per cent
of total agricultural production in the region.
17. The yarn sector, on the other hand, made good use of the incentives.
18. Örnek Sanayi Sitesi, where the machinery cluster is located, was established under
the auspices of the Turkish government and UNIDO.

19. About 150 firms are located in this part of Gaziantep, most of them in the footwear,
flour, carpet, yarn and metal manufacturing sectors.
20. Likewise small and medium-sized enterprises in the footwear cluster around Nizip
Street aspire to move to the organized zones.
21. Ayata (1987) found that 40 per cent of the entrepreneurs and 60 per cent of the
producers in the Kayseri carpet sector came from a mountainous district called
Hacilar near Mount Erciyes in Central Anatolia, where arable land was scarce.
This echoes the case of Babadag in Denizli and Besni in Adiyaman. See Chapter 8
for a discussion of this issue.
22. Another factor in the attractiveness of Gaziantep may be the fact that Gaziantep
was relatively safe from the Kurdish uprising that began in the late 1980s.
23. Several of the interviewees argued that the Gaziantepians’ entrepreneurial spirit is
inherited from minority groups that lived in the city in the past, Armenians in
particular (see also Quataert, 1999).
7 The Leather Clothing Cluster in Istanbul
1. Other leading locales are Izmir, Usak, Manisa, Bolu, Bursa, Denizli and Tekirdag.
2. Istanbul was also among the main commercial centres for commodities such as raw
leather, processed leather, fur, silk and spices in the Byzantine era (Mantran, 2001).
Notes and References 193
3. By the seventeenth century the number of tanneries in Istanbul had risen to
about 700.
4. Specifically, a French physician went to Turkey in 1737 and travelled around the
country to learn the secrets of tanning and leather manufacture. ‘The records further
show that an Armenian also came to Turkey from England to find out the secrets
of making colored (yellow and red) morocco leather. This type of soft leather has
since then become known in England as Turkish leather’ (Union of Chambers of
Commerce, Industry and Commodity Exchanges of Turkey, 1958, p. 4).
5. The leather industry was still of prime importance in the late Ottoman era, as
evidenced by the sectoral distribution of industrial establishments in Turkey in
1915: of the 264 enterprises that employed ten or more workers, 13 were in the

leather industry (Ökçün, 1971), which is a significant figure given that the sector
was dominated by small firms.
6. There were 17 leather factories and about 100 small tanneries in Kazliçesme in the
late 1920s (Yelmen, 1992).
7. Yelmen, the father figure of the Turkish leather industry, argues that the official
figures underestimate the size of the Istanbul leather industry, whose dominance
was arguably even more pronounced from the 1960s (Sümer, 1969).
8. Since 1985 raw leather exports have been subject to restrictions and special
permission is required to export this valuable material. There are similar regulations
in other countries, given the shortage of the material. Archival records indicate
that exports of high-quality raw leather were also restricted during the Ottoman
era (Faroqhi, 2000).
9. Turkey is the top importer of untreated sheepskin and lambskin, the main types
of leather used by the leather clothing industry, and ranks fifth in the importation
of processed sheepskins and lambskin (ITC, 2002).
10. UNIDO and the FAO supported the founding of a leather research institution in
Pendik (Istanbul) in the late 1960s. In 1985 Istanbul University launched a two-year
undergraduate programme specializing in leather-related issues. In 1991 the same
university established a centre for leather R&D and education. Other institutions
followed suit in subsequent years, and now 15 programmes are offered by various
Turkish universities. In addition there are four leather-related occupational
schools, five schools for footwear-related subjects and eight that specifically focus
on leather garments (two of the latter are located in Istanbul: the Rüstü Üzel
Anatolian High School and the Besiktas Ortaköy Industrial Occupational School).
KOSGEB established the Istanbul Leather Specialization Centre to support small
and medium-sized enterprises, and there are four foundations (VAGEF, TASEV,
HASEV and the Turkish Leather Foundation) that aim to improve the state of the
Turkish leather industry, all of which are located in Istanbul.
11. Yükseker (2003) notes that relations among informal traders engaged in the same
area of activity are also characterized by competition rather than cooperation.

12. The annual import figure is about $250 million, whereas exports amount to about
$55 million (SPO, 2000).
13. The leather goods industry overwhelmingly comprises small firms, which also
make products in imitation leather.
14. In the late 1990s exports reached $200 million, if informal trade is included
(SPO, 2000).
15. The category ‘footwear’ includes not only leather shoes but also those made of
other materials, as well as slippers.
16. In the early 1990s Istanbul footwear producers joined the informal Laleli market,
and since then the scale of unregistered exports has been significant. For instance
194 Notes and References
in 1996, which was one of the most successful years for the Laleli market, informal
footwear sales amounted to $350 million, compared with $150 million for registered
exports (Yükseker, 2003).
17. According to the SPO (2000, p. 146), on average the export price of Turkish shoes
is 25 per cent lower than the EU price and 70 per cent higher than that of some
countries in the Far East.
18. The customs union has benefited non-EU countries more, given that the leading
countries from which Turkey imports leather clothing are India and China (SPO,
2000).
19. In the not too distant future, however, it is likely that this informal transnational
economy will be regulated (Yükseker, 2003).
20. The Grand Bazaar and its environs have been the preferred location for Istanbul’s
highly developed jewellery sector for centuries. Turkey is amongst the world’s top
ten importers of gold, which is mainly used for the manufacture of jewellery.
Gold is also a popular investment good (coming third after bank deposits and real
estate), and the sector accounts for 2 per cent of GNP (Istanbul Altin Borsasi, 1999).
Also, silver jewellery is an important product in the jewellery quarter in the
Grand Bazaar, which controls 90 per cent of silver jewellery production and trade
in Turkey. There are about five wholesalers, 100–150 workshops and 150–200

shops specializing in silverware in and around the bazaar (ibid.).
The concentration of the cinema industry in and around Yesilçam Street
provides another interesting case of clustering in Istanbul. Located in Beyoglu,
the cultural centre of Istanbul, Yesilçam Street and its environs were the preferred
choice for the owners of cinemas and importers of foreign films. Over time
local film companies began to flourish in the area as well, forming their own
cluster in the district. Film companies typically had a producer, a manager, an
accountant and several clerical personnel. Each had a warehouse for storing
films and material such as posters. Cluster participants such as producers,
bankers, actors and actresses attended the same local restaurants, bars and cafes
(such as Bap Cafeteria, Haci Salih, Özsüt and Melek), where they would talk
about work-related matters, memories and the like. Sener (1971) notes that
cafes such as Ata’nin Kahvesi and Sanat Kahvesi acted as contact points. It was
known who attended which cafes: ‘If you are looking for a producer, for
instance, you go and check the cafe that he attends. Even if he is not there,
they will know where he is. Or you just leave a message’ (ibid., p. 3). There
were also key individuals who performed certain functions. For example one
man was skilled in clearing imported films through customs, and a leading
banker played a key role in financing film projects. Related and supporting
businesses and services were also present in the area, including hairdressers,
transportation companies and tailors.
21. Over the years virtually all the remaining residential buildings in Laleli were
converted into shops and warehouses. The number of shops targeting informal
traders had reached about 10000 when the market peaked in the mid 1990s
(Yükseker, 2003).
22. For a comprehensive analysis of the shuttle trade between Laleli and Moscow
see Yükseker (2003).
23. This can also open the way for criminal organizations. In fact the Turkish and
Russian mafias have begun to play a role in the market. This is associated with the
recent involvement of wholesalers and transportation companies in the later

stages of the value chain.
Notes and References 195
24. The fact that the parties to a typical transaction are of the opposite sex introduces
another dynamic in that the customary long-term, stable relationship with the com-
mercial partner might take the form of an emotional relationship (Yükseker, 2003).
25. Another sector with scattered concentrations in Istanbul is footwear. The historical
location for footwear producers in Istanbul was Gedikpasa, which became a central
district as Istanbul expanded outwards, whereupon some producers chose to
move to other areas, such as Ikitelli and Yeni Bosna. Nowadays, apart from being
able to offer low prices, these producers are very flexible thanks to the existence
of the informal economy (which facilitates labour movements, for instance) and
the presence of many other producers and suppliers, which is conducive to close
subcontracting relations. Although Gedikpasa mainly serves the price-sensitive
end of the market, higher-quality shoes produced by larger firms are sold to
former republics of the Soviet Union, usually via registered exports (Yükseker,
2003). The larger producers are scattered around the city and have only recently
targeted the upper end of the market (SPO, 2000).
26. Tannin was such a valuable compound that leather producers in Çesme (Izmir)
and Istanbul were not very willing to sell it to producers located elsewhere in
Anatolia (Faroqhi, 2000).
27. Yelmen (1992) identifies seven phases in the historical development of
Kazliçesme. The first stage was dominated by a number of leading factories, some
of which were owned by minorities, particularly Jews, Armenians and Greeks. The
second stage began in the 1950s and was dominated by the first generation of
Turkish leather industrialists. The third and fourth stages can be considered as
succession periods, during which management was transferred to the second and
third generation of family members, respectively. New entrants to the sector –
migrants from Eastern Turkey – marked the beginning of the fifth stage, and the
sixth stage is associated with the boom in demand in the 1970s, as a result of
which some leather producers moved from Kazliçesme to the nearby town of

Çorlu to enlarge their businesses. Kazliçesme was a rather crowded and compact
place, occupying roughly 100000 square metres of land, and there were few opportu-
nities for enlargement. Çorlu, which had always been an important supplier of raw
leather was the preferred location for tanneries that wished to enlarge their
businesses since it was very near Istanbul and had the necessary water supply. The
last stage that the district went through was the exodous from Kazliçesme to
Tuzla in the early 1990s. At that point there were about 200 leather firms in
Kazliçesme, as well as firms specializing in related machinery and chemicals, plus
sectoral associations, banks, warehouses and restaurants.
28. Tanners were among the leading members of an organization called Ahilik, which
defined the rules that governed all business activities and therefore played an
important part in Ottoman economic life until at least the eighteenth century
(Yelmen, 1992).
29. For example the Izmir leather producers joined forces to import raw leather and
chemicals.
8 Conclusions
1. The factors that played a part in the emergence of other clusters touched upon in
this book are similar, including chance events in the case of the Tavas men’s outwear
cluster, and historical circumstances in the Yatagan’s cutlery cluster (see Chapter 5).
2. Relatedly, the case of the Istanbul leather clothing cluster provides evidence
against Cohen and Field’s (1999) argument that clusters in the same business
196 Notes and References
around the world resemble each other closely in terms of industrial and social
structure. The Istanbul leather firms prefer to internalize the key operations in the
value chain, unlike their Italian counterparts in Santa Croce, for instance, which
are flexibly specialized (Amin, 1994).
3. A related and interesting point for further research is how a certain strategic path
is agreed upon for a network of firms as a whole.
197
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