What determines the performance of small business units? Insights from a jewellery cluster

This paper aims to investigate the factors that determine the performance of small business units using a field survey conducted in a small jewellery cluster in Mangalore district of Karnataka state (India).

The estimates of the median-based quantile regression model are used to analyse how a change in small firm output is determined by seven key factors such as year of establishment, the source of finance, the source of design, lack of demand, design done by the staff, the number of skilled workers, and constraints.

The study finds that the factors such as sources of finance, design, customer relation and skilled manpower are the major determinants of the growth of jewellery business. Based on the findings, the study suggests that the invigoration of business performance by high degree of competitiveness, coupled with technological advancement and hiring of skilled labour, is essential for the sustainability of jewellery units.

The study pinpoints the problems and prospects of traditional business units located in an industrial cluster. Further, it suggests the different ways of strengthening the performance of small business units in India.