There has been a common picture in economic development that micro and
small enterprises (MSEs) tend to conglomerate in various clusters for
the sake of gaining location advantages. These MSEs then create
inter-firm linkages and business strategies as the two play an important
role in their performance. By taking selected manufacturing MSEs that
operate in various small industrial clusters in East Java, Indonesia,
this research examined the relationships between the inter-firm linkages
and business strategies applied simultaneously by MSEs and their
impacts on the firm's performance. Viewed from the perspective of a
co-opetition strategy, the results of this study revealed that some
types of inter-firm linkages and business strategies matter for the
MSEs' performance. However, within small industrial clusters, inter-firm
linkages seem to be less effective compared to business strategies in
affecting a firm's performance. [ABSTRACT FROM AUTHOR]