Institutional inertia induced by the institutional change in traditional Nishijin-ori Necktie industry of Kyoto in the post-1970s
Muwei Chen

The clusters featured by flexible specialization are faced with an increasing diversity of the products turned out and heterogeneity of the actors. As a result, the “subclusters” have formed within the base clusters. And they are influenced by both the base cluster and the industry they belong to. However, the mechanism of how the two forces influence the evolutionary route of the subclusters is not clear. This paper intends to fill this gap by analyzing the history of the Nishijin-ori necktie cluster, a subcluster within the silk weave cluster in Kyoto, in the post-1970s.

This paper argues that the industrial changes and the performance of the base cluster are mediated by the institutions of the subcluster, which are devised and revised by the actors. However, the actors, both the individual entrepreneurs and the professional associations, have either failed in institutional changes or actually reinforced the extant institutions, which resulted in an institutional inertia. In consequence, before the 1990s the industrial crises were buffered by the extant institutions, half relying on the base cluster. But with a decline of the base cluster thereafter, the institutional inertia had hampered the necktie cluster’s ability to deal with industrial changes. Therefore, in the 2000s the industrial crises--- the shift of the ODM&OEM to China and the policy of “no necktie in office”--- have led to an overall decline of the subcluster. On the other hand, the crises in the 2000s suggested chances for institutional changes as can be observed in the entrepreneurs’ endeavors, which aim to bridge a connection between silk weave tradition and a new necktie market.

This study will contribute to an understanding of the dynamism of clusters by bringing in institutional theory. In addition, as to the Nishijin-ori necktie cluster, this study will also complement the lack of research on the silk weave cluster in Kyoto after the 1970s.