Abstract
Egypt has been encouraging industrial districts (IDs) since its independence in 1952 and has applied the general basic concept of industrial districts, referred to as “industrial estates”. This study will contribute to the literature on policy interventions at the regional and national levels in developing countries by highlighting the main characteristics of IDs in Egypt, identifying the main factors affecting the location decision or the investors’ preferences by analysing the quantitative data of all firms located in these districts and the spatial data related to ID location, and classifying the IDs into groups according to the main variables/determinants extracted from the investors’ location decisions. “Determinants” is used here not in a causal sense, since this is an exploratory descriptive analysis that cannot reach definitive conclusions around causality. The results may help decision makers in Egypt to formulate better policy for IDs by finding a group of IDs that are desirable for investors and allow for further investigation of the characteristics of the IDs that achieve a better score according to the classification criteria, which will help in better policy formulation around IDs and industrial development more broadly. This study analysed some of the critical location determinants that affected investors’ location decisions in the industrial districts in Egypt from 2003 to 2017. The analysis used census industrial sectoral data for all firms located in the IDs obtained from the industry records. The year 2003 was used to describe the status of the IDs and the two available data points, namely 2009 and 2017, were used for the statistical analysis. The analysis consists of three steps. The first step concluded that there is a statistical difference between the IDs, which are grouped according to the seven regional economic units in Egypt in terms of the importance of the main critical determinants for manufacturing location decisions in 2009 and 2017. In the second step, the study performed principle component analysis (PCA) and reduced the determinants to a few components as the most important determinants of the location decision. In the final step, cluster analysis was used to classify the IDs into similar groups according to the main location determinant extracted from the previous step, hence to allow for further investigation of the characteristics of the most desired locations. The cluster analysis (CA) result shows, first, that although the seven regional economic units in Egypt reflect different development realities, these realities are not reflected in the classification of the IDs. Second, that the manufacturing location determinants used in the analysis do not include both the essential and developmental determinants that are needed for the development of the IDs in Egypt. Third, that there is a need for deep investigation of the characteristics of the formed clusters based on case studies and firm-level data.
M.Com. (Philosophy in Industrial Policy)