Rise and Fall of Cities: Measuring Spatial Clustering and Economies of Urban Agglomeration in West Java

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With others neighboring Provinces in the western part of Java, the West Java Province shares the southeast Asian most densely urban area (Bodebek as part of Jabodetabek and Greater Bandung). This research tries to identify the spatial clustering of urban economies activities using employment data from Economic Census of 2006 as proxy for urban agglomeration. Using the identification result, we then estimate aggregate production function of the urban agglomeration area to calculate it’s economies of agglomeration.  From the result we found that both Bodebek and Greater Bandung metropolitan area are both have been reach the stage of saturation in their economic activity.  Meanwhile, the alternative definition of Bodebek shows the stage of slight increasing return to scale, indicate the economies are trying to expand to regain the economies of scale that has been saturated in origin area.

Discussant: Prof. Rusli Ghalib