Is industrial agglomeration increasing? New evidence from a small open economy

Abstract

Purpose

The purpose of this paper is to examine changes in manufacturing agglomeration in a small open economy over the last decade. This is done during a time when manufacturing in most developed countries is in relative decline.

Design/methodology/approach

This work adapts the methodology developed by De Propris to measure the relative level of manufacturing agglomeration across space and time. It combines different measures utilising the location quotient technique, thereby allowing the relative strengths of manufacturing in different areas to be compared with the national (UK) level. The work goes further by also calculating the EG index to compare the levels of concentration and specialisation.

Findings

This research shows that manufacturing agglomeration has increased in Wales at a time when manufacturing employment is decreasing. Concentration and specialisation have continued to increase across the last decade despite manufacturing's steady decline.

Originality/value

This work details for the first time the relative intensity of agglomeration across space and time in a small open economy. This is often neglected in other economic “cluster” work but may be key to understanding economic development in the twenty‐first century.

Citation

Crawley, A.J. and Hill, S. (2011), "Is industrial agglomeration increasing? New evidence from a small open economy", Journal of Economic Studies, Vol. 38 No. 6, pp. 725-740. https://doi.org/10.1108/01443581111177411