Analysis of Industrial Agglomeration Patterns: An Application to Manufacturing Industries in Japan

The standard approach to studying industrial agglomeration is to construct summary measures of the “degree of agglomeration” within each industry and to test for significant agglomeration with respect to some appropriate reference measure. But such summary measures often fail to distinguish between industries that exhibit substantially different spatial patterns of agglomeration. In a previous paper, a cluster-detection procedure was developed that yields a more detailed spatial representation of agglomeration patterns (Mori and Smith [28]). This methodology is here applied to the case of manufacturing industries in Japan, and is shown to yield a rich variety of agglomeration patterns. In addition, to analyze such patterns in a more quantitative way, a new set of measures is developed that focus on both the global extent and local density of agglomeration patterns. Here it is shown for the case of Japan that these measures provide a useful classification of pattern types that reflect a number of theoretical findings in the New Economic Geography.