The large leader firm: Good or bad? A case study of a leader firm-supplier relationship

Helen McGrath and David Jacobson INTRODUCTION This chapter begins with a review of the literatures on industrial districts and leader firms. Over the period since the 1980s many ‘traditional’ industrial districts of large numbers of small firms in one location, specializing in the production of different parts of the same product, have undergone significant structural change. In some cases they have simply gone into decline as a result of loss of competitive advantage to cheaper locations of production in the Far East (for example, the textile industrial district of Como). In other cases, as a result of market expansion and integration and the forces of globalization in general, they have been displaced, the small firms going out of existence, being replaced by a small number of large firms (for example, the eyewear districts of Belluno, in the Veneto region). This raises the question of whether, in the context of such forces of globalization (lower costs of production, market expansion and integration) the possibility exists of positive associations between small firms from within small firm networks, and large, leader firms. Given that, as will be shown, there is indeed evidence of such positive associations, we focus on a specific example and question the extent to which it corroborates the international evidence. The particular case examined in this chapter is that of the fish processing industry in North Dublin, Ireland. There is evidence of industrial districtlike structure and behaviour in this sector. One of the firms in this district formed a close,….