The relation between spatial concentration and competition in the context of cluster approach: The case İstanbul Merter Textile Center

Being one of the most significant policy and implementation tool in regional planning and regional economics, cluster approach is a crucial thought which elaborately aim at exploring why some firms are located near each other in the space by regarding the effects and outcomes of the spatial proximity. By taking account of this issue, the connection between spatial concentration and competition is primarily signified by Alfred Marshall who brings the concept of industrial district forward by focusing on the textile and garment industy around Lancashire in England in 1890. Following Marshall, distinctive thinkers such as Walter Isard, Paul Krugman and Michael Porter have substantially contributed to the studies concerning cluster approach in the historical process with the aim of expounding of the connection of spatial concentration and competition by diverse theories and approaches. These approaches and disciplines such as neoclassical school of economics, Regional Science, economic geography and from this point the New Economic Geograpy and eventually the Diamond Model which was put forward by Michael Porter essentially scrutinized the multidimensional relation between the concept of spatial concentration and competition by meticulously disputing the causes and the consequences of this interaction. As a principal argument point in regional planning, cluster approach fundamentally focuses on spatial concentration and competition of certain firms which locate closely to each other in a given space and have concrete relationships to gain some beneficial and lucrative outcomes such as maximizing their profit rates in a particular sector. Being questioned thoroughly with descriptive studies which regards the historical background and distinctive methods of analysis such as core-periphery model introduced by Krugman and the Diamond Model presented by Porter, the likely outcomes of the policies and implementations regarding cluster approach in the framework of economics and the spatial reflections of the relation of spatial concentration and competition is painstakingly debated with its diverse dimensions which can be classified as urban, regional and national scales. The pervasive discussions in the context of cluster approach and its implementations form one of the crucial point in the development process of many countries including Turkey as they take cognizance of the approach as a significant tool for their competitive advantage both in national and international scale. The objects reflected both in the Development Plan of 2009-2013 and New Encouragement System regarding to support and develop sector cluster policy indicates that like other many countries Turkey also takes cluster approach up as a consequential development strategy for its regional and international competitiveness. The first part of this thesis states the aim, scope, method, hypothesis and limits of the study. The aim of this study is to investigate the relation between spatial concentration and competition by bearing in the mind the textile sector in Merter Textile Center and focusing on the history of spatial concentration of the textile firms. The scope of the study is to express the history of the development of cluster approach in the world and Turkey considering three cases in three cities from China, Italy and Turkey and to apprehend the development of textile industry in İstanbul together with the spatial concentration of textile firms in Merter Textile Center. The method of the study is initially formed by a discriptive part which includes the history of cluster approach in the world and the history of textile industry in İstanbul and then an experimental part which comprises a two-stage model by calculating two indices designated as the Index of Spatial Concentration and the Index of Urban Competition. That the spatial concentration of the textile firms in Merter Textile Center is dependent on the competition of the textile firms is the hypothesis of the study. The limit of the study is composed of 12 years as the thesis esssentially takes into account the years betweeen 2002 and 2013. The concepts of cluster and spatial concentration and competition in the context of the cluster approach are argued at the beginning of the second part of the thesis. Although the concept of spatial concentration can be explained from different perspectives, it can be delineated as the increase of the number of the firms which operates the same, similar or complementary activities in a certain space and the decrease of spatial proximity of those firms. As for the concept of competition, it has diverse dimensions such as urban, regional, national and international scale and it is always firms that compete which each other in the final manner. Although there is no concrete aggrement on the concept of competition, one could claim that competition essentially refers to the permanent economic power of a firm when compared to the others from the perspective of economics. The third part the thesis clarifies the historical background of cluster approach. After Alfred Marshall, who is the first scholar in the context of cluster approach with his industrial district concept, Regional Science, economic geography and the Diamond Model which was put forward by Michael Porter are the main significant points which make serious contributions to the cluster approach. At the beginning of this part, after a brief explanation of the development of cluster approach in the world, the development process of cluster approach in Turkey is discussed. In Turkey cluster approach is taken into account in the context of "Organize Sanayi Bölgeleri" (Organized Industry Districts) and "Küçük Sanayi Siteleri" (Small Industry Sites), which can be described as the industrial areas which comprises the same or different activities in an industry in a given space. In addition to this point the development plans developed by the state having a legal basis includes the objects regarding cluster approach. The final explanations in this part goals to discuss the concepts of organic cluster and planned clusters and the textile sector in terms of cluster approach. To this end, the third part of the thesis covers the cases as regards spatial concentration in the textile sector from three countries and three cities. Discussed from the perspective of the relation between spatial concentration and competition, Shaoxing in China, Prato in Italy and Denizli in Turkey are the three significant cities which concentrate spatially in terms of textile sector. The fourth part of the thesis explores in the first place the historical story of the textile industry in Istanbul and then secondly the development of Merter Textile Center, which is located within the boundaries of Güngören district, from the perspective of spatial concentration of the textile firms. The spatial concentration of textile firms is evaluated together with the development of the district. To analyse the development of Merter Textile Center and the spatial concentration of textile firms the data which are provided by Istanbul Chamber of Industy and Istanbul Chamber of Commerce are processed. The textile firms which locate in Merter Textile Center and also are the members of these two chambers are classified considering the years 2002 and 2013 and the spatial maps which states the spatial concentration of the textile firms are produced according to this data through Arc-GIS. Presenting the textile cluster of Merter Textile Center which includes different and complementary firms is also another significant object of this chapter. To this end the locations of the other firms such as banks, patent centers, logistic firms, cargo firms and other related institutions such as MESİAD, which is a local institution whose mission is to improve the interaction between textile firms, Güngören Municipality and Yıldız Technical University are designated in a spatial map produced through Arc-GIS. Declaring the results of the interviews which were made with five textile firms which locate in the area, the fifth part of the thesis initially argues how textile firms regards the connection of spatial concentration and competition. The second object of this part is to develop a two-stage model regarding the spatial concentration and competition of the textile firms. The first stage of the model explores two indices which are designated as the Index of Spatial Concentration and the Index of Urban Competiton and the values of the indices between 2002 and 2013. The second stage of the model calculate the regression analyse betweeen the variables through SPSS. The Index of Spatial Concentration is taken into account as the dependent variable to the independent variable, that is the Index of Urban Competiton. According to the results of regression analyse it is found that between 2002-2013 the relation between spatial concentration and competition of textile firms in Merter Textile Center is not very strong, as the R2 value equals 0,4. In the last part of the thesis the outcomes which are provided by the study are disputed in the context of Merter Textile Center and by considering the case Merter Textile Center general evaluations are stated.