An inquiry into the transformation process of village-based industrial clusters: The case of an iron and steel cluster in northern Vietnam

While village industries are known to play an important role in the development of rural areas in developing countries, little is known about village industries in transition economies. This paper inquires into the transformation process of a village industry in northern Vietnam from a traditional to a modern cluster where new iron and steel products are produced. We found that proprietors' human capital acquired by formal education and experience in marketing and management as well as their family ties are critically important for upgrading product lines and improving management, marketing, and consequently the overall performance of the village enterprises.