Conclusion

Abstract

For the last several years, we have studied industrial agglomeration and made an attempt to explain why firms agglomerate (see for example, Kagami and Tsuji (2003), Kuchiki and Tsuji (2005)). Industrial agglomeration is not a single phenomenon, but it has lots of variety: Kagami and Tsuji (2003) summarize agglomerations into five categories: (1) clusters where locally specialized items are produced; (2) clusters where a large core (anchor) firm has many subcontractors; (3) urban processing clusters where many basic production processes are treated; (4) clusters where advanced technologies and their services are transacted — such as information and communication technology (ICT) clusters; and (5) government-led industrial parks and estates often seen in developing countries. In order to explain these agglomerations, the theoretical frameworks of agglomeration from Marshal to Kurgman, Porter, Fujita and Thisse are available. Economies of scales and transportation costs are key issues in their analyses.