Agglomeration Economies, New Industrial Clusters and Japanese Multinational Firms Location in East Asia

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Agglomeration economies and industrial clusters play a crucial role in the Japanese manufacturing sector, particularly in East Asia. The author analyzes production functions and agglomeration effects from 1985 to 2000, revealing positive impacts on production, especially through externality coagglomeration. The study also examines foreign direct investment location factors from 1986 to 2009, highlighting the importance of market potential and supplier access. With Japan's declining population, the author advocates for new digital industry clusters to mitigate economic challenges, emphasizing the need for innovative agglomeration strategies.