Abstract - This study investigates the spatial distribution of large and medium
manufacturing industries in Indonesias East Java province. The topics of
investigation include the degree of localisation and co-localisation, the
randomness of the observed localisation, and the industrial structures of cities.
The factors that contribute to the localisation and specialisation are also
examined. Applying the notion of neighbourhood effects and the approach of
spatial dependence model, some sorts of agglomeration spillovers are observed