An Empirical Examination of the Flowchart Approach to Industrial Clustering: Case Study of Greater Bangkok, Thailand

Industrial agglomeration, or clustering, is currently a hot topic in economics. There are two reasons for this. The first reason stems from the development of economic theory. There is a growing literature of the “new economic geography” initiated by Krugman (1995), Fujita, Krugman and Venables (1999), and Fujita and Thisse (2002). These new fields have expanded the boundaries of economic theory to new frontiers. The second reason relates to practical applications, such as economic policy. With the development of information and communication technology, commodities, human resources, and funds can move anywhere in the world in a relatively short time; the tides of so-called globalization are shaking all economies, developed and developing. This trend has resulted in the common practice of trying to attract foreign or even domestic resources located in different regions into an economy by stimulating a region’s economic development. In order to invite foreign firms, for instance, policy makers must offer benefits to these firms; in doing so, they must understand the nature of agglomeration. Successful examples of such policies can be found in East Asian economies, one current example of the ongoing “East Asian Miracle.”