Abstract
Vigorously promoting clustering advantage is a useful way to increase competitivty for small clustered firms in china. Small clustered firms mostly locate in coast area in east china, especially in Zhejiang province. This study researches empirical evidence on small clustered firms in hangzhouwan area (zhejiang province, china), indicate some problem in the process of the small clustered firms developing cost advantages and analyze the reason which caused these problems, according to the cost advantage theory of small clustered firms. And the author also discusses the way to resolve these problems from inner and outer aspects, so that it is better develop the costal advantage for small clustered firms.
Key words: local clusters of the small business; the cost of the dominant position; competition
