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WHY MANUFACTURING INDUSTRY PERSISTED TO CLUSTER SPATIALLY IN JAVA?

Gadjah Mada International Journal of Business

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Field Value
 
Title WHY MANUFACTURING INDUSTRY PERSISTED TO CLUSTER SPATIALLY IN JAVA?
 
Creator Kuncoro, Mudrajad
 
Subject agglomeration; concentration; NTT; NCT; NEG
 
Description This paper attempts to examine which theory is best in explaining the geographic concentration in Java, an island in which most of the Indonesia’s large and medium manufacturing industries have located overwhelmingly. Using the regional specialization index as a measure of geographic concentration of manufacturing industry and pooling data over the period 1991-J996, our econometric analysis integrates the perspectives of industry, region (space), and time. The most striking result is that most of the NCT (Neo-Classical Theory) hypotheses can be rejected. Moreover, most of the findings support the NTT (New Trade Theory) and NEG (New Economic Geography). Our findings suggest that manufacturing firms in Java seek to locate in more populous and densely populated areas to enjoy both localization economies and urbanization economies, as shown by the significance of scale economies and income per capita. The interplay of agglomeration economies is intensified by the imperfect competition of Java's market structure. This paper gives empirical evidence with respect to path dependency hypotheses. This finding supports the NEG's belief that history matters: older firms tend to enhance regional specialization. In addition, the results, as shown by statistical significance of its regional dummy, suggest that most of the specialized industries in Java have better access to infrastructure.
 
Publisher Master in Management, Faculty of Economics and Business, Universitas Gadjah Mada
 
Date 2003-06-12
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier https://jurnal.ugm.ac.id/gamaijb/article/view/5410
10.22146/gamaijb.5410
 
Source Gadjah Mada International Journal of Business; Vol 5, No 2 (2003): May-August; 221-247
2338-7238
1411-1128
 
Language eng
 
Relation https://jurnal.ugm.ac.id/gamaijb/article/view/5410/4406