Spatial agglomeration and specialization in emerging markets

Purpose: The paper aims to investigate the role of specialization and agglomeration forces on industry performance in an emerging market, namely, Thailand. In particular, the impact of clusters and the influence of complexity will be tackled. Design/methodology/approach: The methodology used is based on the work of Delgado et al. (2014). Industries and clusters are assigned to a certain category according to their respective level of specialization and complexity. Performance measures are then computed for each category. Findings: It was found that the agglomeration of similar industries and co-located and related industries increase the performance of firms in terms of gross output per employee and remuneration per employee. Moreover, the increase of performance induced by the complexity level of an industry was closely related to the level of specialization. Originality/value: Building on a cluster mapping, this study brings new insight on the effect of specialization and agglomeration on performance in emerging markets. In fact, the paper show how performance can be enhanced in less sophisticated and developed economies.