Industrial Agglomeration, Clusters, and Regional New Firm Formation: A Case Study of Taiwan’s Counties/Cities

Chih-Cheng Chen

Applied Econometrics and International Development, 2015, vol. 15, issue 1, 173-190

Abstract: In this study, we explore the relationship between the formation of new firms and the concepts of industrial agglomeration, clusters and triple helix theory from the perspective of Taiwan’s counties/cities. We analyze regional data from Taiwan for the period 2000 to 2012 using a feasible generalized least square model. Our findings show that a lower agglomeration of manufacturing and service industries and a greater degree of industries clustering in a county/city result in a higher formation rate. In addition, the growth rate of “regional income” in a county/city, regional population, number of medical staff per 10,000 of the population, the police expense per capita, and the social increase rate of population significantly promote the entrance of new firms in Taiwan. In contrast, a rise in the land price index lowers the number of new firms in a county/city significantly. More new firms are created in the counties/cities located in northern, middle, and southern Taiwan than in eastern Taiwan, which is less developed and has an inconvenient transportation system. Finally, within the triple helix theory proposed by Kim et al. (2012), which indicates that the R&D activities of universities is helpful for the formation of new firms within counties/cities in Taiwan.

Keywords: industrial agglomeration; cluster; triple helix; feasible generalized least square; new firm formation. (search for similar items in EconPapers)
Date: 2015
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