Commercial Patterns and Spatial Networks in Hanoi’s Old Quarter: A Case Study of Vendors on Lan Ong Street

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Weiner, Daniel; Tufts University
Asian Studies; Entrepreneurial and Small Business Operations; Organizational Behavior and Theory
paper description
Walking the streets of the Hanoi’s Old Quarter, one can easily begin to question the economic viability of the area’s commercial pattern. That is, how can multiple stores that sell the exact same products coexist in such a densely concentrated arena? Why do traders with the same goods choose to locate next to each other? Through a literature review of the history of Hanoi’s Old Quarter as well as a case study of the vendors on Lan Ong Street, I examine the purpose and the functionality of the Old Quarter’s spatial structure. I find that the vendors in the Old Quarter have more or less maintained the feudal-era guild structure and social networks of the Old Quarter that was formed over 1,000 years ago. I also find that vendors in the Old Quarter benefit from the localization externalities of agglomeration- input sharing, knowledge spillovers and labor pooling. Further, the extent to which the externalities of agglomeration are practiced are determined by the strength of social bond between the vendors on a particular street within the Old Quarter. On Lan Ong Street, I find that there exists a positive and cumulative feedback effect between the amount of social capital between the vendors on the street and the visibility of localization externalities.