Enhancing the competitiveness of Palestinian SMEs through clustering

The purpose of this paper is to prove that competitiveness of small- and medium-sized enterprises (SMEs) among developing countries in the conflict regions will be enhanced through clustering.

The study used quantitative and qualitative methods of research. Questionnaires were administered on a sample of SMEs working in food-processing sector in Palestine, Jordan and Israel. Semi-structured interviews were conducted with ten Palestinian SMEs to deeply understand the food-processing cluster. The dependent variable “SMEs competitiveness” is measured by the balanced scored card while the independent variable “cluster” is measured by the “related and supporting industries.”

The cluster and SMEs performance of food-processing sector in Palestine is the lowest in relative to Jordan and Israel. The results show a significant positive relationship between cluster and SMEs performance in the Palestinian food-processing sector.

Cluster can help SMEs in the food-processing sector in Palestine to enhance their performance. It has also been found that these SMEs need to build linkages among themselves and with related and supporting industries within the Palestinian territories, Jordan and Israel.

The paper discusses the enhancement of SMEs performance working in a conflict region through clustering.