Agglomeration economies are the important factors for the regional development. However, the common indicators to measure them, such as Gini Coefficients neglect the spatial ingredient of data, leading to a-spatial estimates. In order to assess spatial neighbor effects of agglomeration economies, this study makes the new attempts by applying a series of techniques of spatial autocorrelation analysis, specifically, measuring the economies of urbanization and localization at the county level in the secondary and tertiary industries of Jiangsu Province in 1999 and 2002. The conclusions in this study reveal that on the whole, the localization effects on the economies of the secondary industry might be stronger than urbanization effects for that period, and highly agglomerative economies were limited within the southern Jiangsu and parts of middle along the Changjiang (Yangtze) River. Moreover, the tertiary industry has been strong urbanization rather than localization economies in the whole Jiangsu. Unlike the secondary industry, the tertiary industry held the high levels of agglomeration economies can be also found in the poor northern Jiangsu, and then the spatial clusters of trade and services might be basically seen in each of urban districts in 13 cities. All in all, spatial autocorrelation analysis is a better method to test agglomeration economies.
