| Industrial agglomeration is a universal economic phenomenon, from the late nineteenth century, economists began to pay attention and study on this phenomenon. As being closely related with geographical space, the relevant theoretical researches on industrial agglomeration breakthrough soon in the areas of industrial economics research, and became the research object in the field of geo-economics, regional economics and international trade research, and the theory of industrial agglomeration has been constantly enriched and evolved.The first economist who tried to explain the industrial agglomeration phenomenon is Marshall (1890), the representative of neo-classical economics. From the perspective of micro-economics , Marshall did the study of industrial enterprises gathering in a particular area and claimed that the economies of scale in the industrial era was the main reason for agglomeration, dividing the economies of scale into internal and external economies of scale. Upon this important assumptions of External economies of scale, Marshall discussed the causes of agglomeration economies and its mechanism from the labor market, the subsidiary industries and technology-related spread, which were summed up later to the three elements of the economy: the labor-market share, intermediate inputs and technology spillovers product. These three elements of the economy are regarded as the origin of the theory of industrial agglomeration. Early twenties, the industry gathering theory of Alfred ? Weber (1909) did research on industrial agglomeration from the point of the industrial area theory. It was Weber who first put forward the method of regional factors analysis, with which Weber figured out principle of minimum cost in deciding the industrial locations , that is, the area of the smallest cost is the best location, revealing the formation of the industrial location is a fundamental driving force for economic benefits - cost savings and the resulting attractiveness of the industry, this principle is still of considerable value in the research of spatial distribution nowadays. However, Weber's study deviated from the social systems, historical and cultural factors, and simply studied from the resources and energy point of view, this induced the result that the Weber's theory has its obvious flaws. In 90s of Twentieth century, Michael ? Porter did theoretical analysis on the phenomenon of industrial clusters from the point of view of the industry and the state advantages. In the theory of competitive advantage, Porter structured the competitive advantage on the basis of the four basic elements (factors of production; demand conditions; relevant and supporting industries; business strategy, structure and competition) and two additional elements (opportunity and government). Porter's researches on the issue of industrial agglomeration were mainly concentrating on the relationship between the business clusters and the competitiveness of enterprises, and focused on the positive effects of industrial agglomeration on economic development, and did not explain the formation of agglomeration. However, Porter's theory of competitive advantage has positive sense, that is the theory pointed out that the Government could play a role in the industrial agglomeration, which is still have very important theoretical and practical significance on industrial agglomeration researches. Paul? Krugman is the representative of the new geographical economics, who has a new breakthrough on the preconditions assuming in the study of classical economics - constant returns to scale and imperfect competition. On the basis of hypothetical preconditions of increasing returns to scale, imperfect competition and transport costs, the new geographical economics use mathematical method to figure out the "center - periphery model" , which is used to explain the spatial evolution of industrial agglomeration. In the new economic geography perspective, the evolution of economic activity is non-linear. Based on the cycle of cause and effect relationship between the accumulation of the spatial concentration of economic activity, economic activity is the product of nonlinear evolution. Meanwhile, increasing returns to scale probe enterprises to concentrate in specific areas, resulting in Brian ? Arthurthe's so-called path-dependent of concentration, enhancing the accumulation cycle to enter the lock (lock-in) state.Since the twenty-first century, the research activity of domestic economists and scholars on industrial agglomeration became prosperous, which is mainly focus on the morphology, evolution model, the formation mechanism and influence factors. Applying the theory of industrial agglomeration, researchers have done a large number of empirical studies, which has laid a solid foundation in industrial policy constitution in China.In this paper, upon absorbing the ideas of the new economic geography, regional economics and based on the course of economic development in Singapore economic theory I use the empirical analysis methods to study the formation, development, and the main factors on agglomeration of petrochemical industries in Singapore. In the basis of empirical research, I put forward some strategic suggestions, such as to strengthen the government industrial policy guidance, to exert the location advantage, to use FDI more reasonably and to improve the degree of industrial agglomeration.This paper is focused on the study of the main reasons and the impact factors for the formation of industrial agglomeration of petrochemical industries in Singapore.Natural endowment is an important environment for industrial agglomeration, but the corresponding relationship between them is not simply. The effects of the natural endowments on industry agglomeration often depend on other factors. On viewing Singapore, there were no natural advantages to the development of petrochemical industry, and its disadvantages were obvious: no crude oil, a small land, lack of capital and special professionals and market. But the Singapore Government strived to attract foreign investment and devoted large amount in infrastructure construction, and attracted of a large number of FDI flowing into Singapore, transnational capital from the initial crude oil refining industry has been flowing into the downstream industries, making the industrial scale rapidly enlarged to form a vertically integrated petrochemical industry. After the formation of industrial agglomeration in Singapore as a "crossroads of the West-East," the geographic advantage is more and more apparent, coupled with the island coastline around the natural deep water ports, so after industrial agglomeration, the natural endowments are enhancing the role played.The impact of external economy is the internal influencing factor. Different enterprises in the space of the region must focus on the size of the resulting cross-externality is an external economy of scale and scope. Petrochemical industry has its specific chain structure, in which upstream and downstream industries are closely related. A series of chemical processes closely linked to the major manufacturers to obtain the optimal distribution of raw materials for maximum efficiency, and this synergy effectively improve the input-output rate, with the price of the industrial chain transmission mechanism reduces the overall industrial agglomeration area prices, enterprises gain from incremental effect size, thus further promoting the industry gather to form a cumulative process cycle.The investment of multinational corporations has played a leading role in the agglomeration of petrochemical industry. Multinational corp. have invested in Singapore heavily, the investment in fixed assets of Singapore's petrochemical industry is the mainly by multinational companies. The success of antecedent investors had an demonstration effect on the following investors, together with Singapore's foreign investment policies to encourage, as well as the Jurong Island's unique geographical location and infrastructure services, Singapore has attracted foreign companies to invest in petrochemical industry continuously. Multinational companies have close the technology associations with the host country, the promotion of the host country's industries, the enhancement of local enterprises and multinational corporations complementary between technology and more conducive to attracting direct investment of transnational corporations and technology transfer.Government in the role of industries is crucial and important. Government of Singapore petrochemical industries in the performance can be summarized as follows: rational to make industrial planning rationally, to vigorously improve the public infrastructure, to develop policies to encourage industries, open and transparent governor , to create a fair economic environment and build up human resources training the Jurong Island chemical and processing technology centers, to encourage research and innovation, and foster knowledge-intensive industries, and make preferential tax policies and financial policies to attract multinational corporations and many other aspects. And no doubt the Singapore Government has made every effort to do its best in all aspects.This study concluded that: industrial agglomeration is a phenomenon with certain regularity of economic industrial activities, meanwhile in the process of agglomeration there brings about advantageous effects, such as the promotion of economies of scale, innovation and technology diffusion, building up rational divisions among enterprises, so industrial agglomeration has a positive meaning to the economic development and it is assumed as the premise of this paper. Through the analysis of the formation and development of industrial agglomeration of Singapore's petrochemical industries comes the conclusion that there are various influencing factors have impacts on the industrial agglomeration, among them, the poor natural endowment does not constitute a substantive impediment, and geographic location and facilities to reduce transportation costs become a prerequisite to attract industrial clustering; pursuit of external economic effect like increasing returns effects and market size effects is the internal driving force of the formation and development of industrial agglomeration; investment of multinational companies in Singapore's petrochemical industries has always played a leading role; the government has played an important role in promoting industrial agglomeration through the improvement of public infrastructure, planning and formulating policies of industries development and etc; the extensive industries also play a role in promoting the further development of industrial agglomeration. This study suggests that: in practice it is necessary to correctly understand and grasp the inherent laws of the industrial agglomeration and promote the key influencing factors to develop on the benefit of industrial agglomeration, and implement the measures to improve the social division mechanism, to moderate the role which the government plays, fully attract and make use of multinational investment, and actively participate in the globalization of economic development, in order to promote regional economies by the development of competitive industries agglomeration and improve the competitiveness of local industries. |
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