The Economic Agglomeration Effects of the Industrial and Business Sectors in Pengerang Johor, Malaysia from a Spatial Perspective

Abstract

The economic agglomeration effects of the industrial and business sectors refer to the positive externalities that result from the concentration of firms in a specific geographic area. These effects can take different forms, including increased productivity, better innovation, and lower firm costs. Additionally, the concentration of businesses and industries in one area can result in knowledge spillovers, where firms can benefit from the expertise and knowledge of other firms in the same field. This study aims to provide spatial visualisation of the industrial area with GIS technology within the Pengerang District. Data from the Pengerang City Council and Companies Commission of Malaysia was utilised to conduct a Getis-Ord Gi* (Hot Spot) analysis to determine the agglomeration pattern of industrial and business activities in the study area. This study identifies Bandar Penawar and Pengerang as the areas with the highest concentration of industrial and business activities. The factors or effects of the economic agglomeration in the study area include the concentration of industrial and business activities, the presence of supporting industries and services, the availability of transportation infrastructure, and the availability of skilled labour. The study also identifies the positive spillover effects of economic agglomeration, such as increased productivity, knowledge spillovers, and innovation. The analysis results can guide future strategic planning in the industrial and business sectors in Pengerang District.