Exploring evidence of spatial economic agglomeration in Ekurhuleni Metropolitan Municipality, Gauteng, South Africa

20 January 2020
Publication Type: Working Paper
JEL Code: O18, O4, R12, R3

Since Marshall’s (1890) work on industrial districts in 19^{th} century England, agglomeration economies are credited for providing the needed catalytic role to economic growth and development. It does this by allowing critical masses, where knowledge spillovers among firms; labour market pooling; and sharing of industry-specific non-traded inputs, prosper. This research employs advanced spatial statistical approaches to analyse the spatial locations and economic sectors data of about 14,000 firms in Ekurhuleni Metropolitan Municipality, a major sub-regional economy in Gauteng economic metropolis and in South Africa. It attempts to answer the following questions; Is there evidence of spatial sectoral clusters, and if present, which kind of spatial economic clusters are they? What is the footprint of these spatial business clusters? The results of four selected industrial clusters show evidence of varying global and localised agglomeration. Localised agglomeration was established to be statistically significant as well. This research complements existing research in suggesting policies that ensure economic growth and development of the regional economy benefits from agglomeration economies.

Series title: Working paper 808
1 January 2020
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