This paper explores the determinants of successful spatial agglomeration and the role of government policy in fostering agglomeration. Through an inductive case study of two successful spatial agglomeration cases, key determinants of successful agglom...
This paper explores the determinants of successful spatial agglomeration and the role of government policy in fostering agglomeration. Through an inductive case study of two successful spatial agglomeration cases, key determinants of successful agglomeration and the role of government policy are identified.
This study finds the followings: First, natural advantage is an important source of agglomeration in heavy chemical manufacturing industries, where natural local condition is important. Whereas, natural advantage is less important as a source of agglomeration in science and knowledge service industries. Second, government policy positively affects agglomeration development by establishing industrial complexes at locations that best fit the required local conditions. Third, input sharing is an important source of agglomeration in heavy chemical manufacturing industries, where scale of economics is important. Fourth, government policy, in heavy chemical manufacturing industries, positively affects agglomeration development by establishing core companies that supply input and developing demand. Fifth, knowledge spillover is an important source of agglomeration in science and knowledge service industries, where idea sharing is important. Sixth, government policy, in science and knowledge service industries, positively affects agglomeration development by encouraging entrepreneurship and collaboration. Seventh, manufacturing worker pooling is an important source of agglomeration in heavy chemical manufacturing industries, where manufacturing workers are important. Whereas, R&D worker pooling is an important source of agglomeration in science and knowledge service industries, where researchers are important. Eight, government policy positively affects agglomeration development by establishing educational institutions that can supply labor to the related industry.