A study of Moratumulla timber cluster: agglomeration theory

Abstract

“Cluster” means purely a grouping. Industries and firms are geographically concentrated as clusters. Location behaviour of firms of a particular industry tends to be clustered together in space as clustering enables them to reach higher economic performance. Alfred Marshall defined the economic benefits gained through the clustered industry as agglomeration effects. Agglomeration economies are the benefits that generate when industries, firms and people locate together in close vicinity to one another in cities. The researchers have discussed agglomeration economies in different contexts. However there was a knowledge deficiency about this in Sri Lanka. This research was based on the theory of agglomeration economies (AE) that aims to study way of functioning sources of agglomeration economies such as sharing, matching and learning in Moratumulla timber industrial cluster. The literature review was studied the theory and identified the indicators to study the sources of agglomeration economies. Moreover the identified indicators were finalized through the professional discussions. Further Questionnaire survey, interviews and observation were used for data collection in order to study the sources of agglomeration economies of Moratumulla. The research was based on the qualitative analysis. Therefore content analysis, network analysis and mapping techniques were used as data analysis of this study. The empirical result of analysis in Moratumulla timber industrial cluster has identified sharing the intermediate input supplies, workers and consumers and a large pool of labor also facilitated the matching. However due to the trend of reduction skilled carpenters’ labor pool in Moratumulla is leading to mismatching. Further Moratumulla can be identified as a center for learning carpentry and act as a workers training school due to the generation of knowledge and diffusion among others through accumulation of knowledge. However Moratumulla timber industry cluster have characteristics of urbanization economies as it goes beyond the localization boundary.