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Plant Location in Theory and in Practice: The Economics of Space
... The role of IZs in enhancing economic growth is particularly explicit in countries that are at an early stage of industrial development (UNIDO, 2012). When choosing distribution centers (Gholamian and Nasri, 2019), production and business locations in general and choosing IZs in particular, investors often pay attention to several factors such as: transportation costs (Launhardt, 1993;Von Thunen, 1966;Weber, 1929), markets (Lösch, 1978), road infrastructure and demand dispersion (Mokrini et al., 2019), business's cost and benefit (Badri, 2007;Greenhut, 1956;Hoover, 1948;Lösch, 1978;Mota and Brandão, 2013;Samuelson, 1938;Snyder and Nicholson, 2008), technology and human capital (Arauzo-Carod et al., 2010), public good (Gabe and Bell, 2004), environmental regulation (Becker and Henderson, 2000;List and McHone, 2000), support from public administration (Friedman et al., 1992;Woodward, 1992), institutional quality (Knack and Keefer, 1995;Sachs and Warner, 1997), etc. ...
... While Christaller (1966) shows that the distribution of goods and the concentration of profits are entirely based on traffic and location, Lösch (1978) model emphasizes that the optimal location is the place that will bring the largest revenue or the largest market that can be monopolized. The cost-benefit model was later developed by numerous studies such as Hoover (1948) and Greenhut (1956). When choosing a location, firms consider factors to reduce input costs or increase output revenue (Badri, 2007;Greenhut, 1956;Hoover, 1948;Lösch, 1978;Mota and Brandão, 2013;Samuelson, 1938;Snyder and Nicholson, 2008). ...
... The cost-benefit model was later developed by numerous studies such as Hoover (1948) and Greenhut (1956). When choosing a location, firms consider factors to reduce input costs or increase output revenue (Badri, 2007;Greenhut, 1956;Hoover, 1948;Lösch, 1978;Mota and Brandão, 2013;Samuelson, 1938;Snyder and Nicholson, 2008). ...
Since the first industrial zones (IZ) was established more than two decades ago, the number of IZs in Viet Nam has mushroomed to meet the demand of national industrial development. However, it is challenging for enterprises, IZs’ infrastructure developers, policy-makers and other users to assess the competence of IZs for their location decisions due to the substantial number of IZs, the insufficiency of information of IZs, the lack of suitable and reliable ranking methods and the absence of a ready-made ranking of all IZs in Viet Nam. Thus, there is an urgent need to identify precisely the ‘attractiveness’ level of the existing IZs based on their own characteristics or in other words, to make a ranking of IZs nationwide. Toward this purpose, this study applied the multi-criteria analysis method to rank the IZs in Viet Nam. This paper is the first ever to successfully conduct a ranking of IZs in Viet Nam with a database constructed at both macro and micro levels, including local economic environment, accessibility, infrastructure, and financial expenses. The ranking is expected to be a useful instrument for enterprises to choose their locations as well as for IZs’ infrastructure developers to measure the attractiveness levels of their IZs to develop better business plans. Moreover, it can be used as a basis for policy makers in IZs planning in a more reasonable and scientific manner.
... The purpose of location theory is to determine the reasons for and explain why a particular factor is important to one industry and not to another (Greenhut, 1982). It also involves the principle of substitution, where an industry selects a site from alternative locations, which in terms of the economic theory, is similar to the problem of substituting labor for capital or land and vice versa (Greenhut, 1982). ...
... The purpose of location theory is to determine the reasons for and explain why a particular factor is important to one industry and not to another (Greenhut, 1982). It also involves the principle of substitution, where an industry selects a site from alternative locations, which in terms of the economic theory, is similar to the problem of substituting labor for capital or land and vice versa (Greenhut, 1982). To better understand location theory, this study presents the location theories of leading writers as explained by Greenhut (1982). ...
... It also involves the principle of substitution, where an industry selects a site from alternative locations, which in terms of the economic theory, is similar to the problem of substituting labor for capital or land and vice versa (Greenhut, 1982). To better understand location theory, this study presents the location theories of leading writers as explained by Greenhut (1982). All these theories generally relate the importance of cost advantage to the selection of a site. ...
... The importance of the location concept in early literature sources has been traditionally linked with distance. The oldest literature dedicated to understanding interrelationships between location and transport includes von Thünen (1826), Launhardt (1882Launhardt ( , 1885, Weber (1929), Palander (1935, Lösch (1954), Dean (1938), Hoover (1937, Dunn (1954), Greenhut (1956), Isard (1956) and Lefeber (1958) who have contributed to the element of general location theory that also implicitly accounts for transport costs (Isard et al. 1998, Bertuglia et al. 2013. ...
... Some models aim to interpret rms' location choices on the assumption of punctiform nal and raw materials markets with given locations. Other models seek to identify the market areas of rms, that is, the division of a spatial market among producers (Weber 1929, Greenhut 1956). Location equilibrium is determined by a logic of prot maximisation whereby each producer controls its market area (Lösch 1954, Hotelling 1929. ...
Bratislava, the capital city of Slovakia, is currently experiencing a period of intensive suburbanisation, which in turn creates demand pressures and increases the price of urban land located in its hinterland. This paper investigates several locational factors, which likely signicantly inuence the demand for land plots and modulate`price-maker' conditions. Based on the population sample of 102 units, the results indicate that built-in infrastructure facilities on land under analysis, advanced transport connectivity in municipalities, and various amenities in the municipality cadastre tend to elevate land prices signicantly. Moreover, the factor of distance from the city of Bratislava plays a major role in household location, which was identied by the apparent decreasing rent gradient pattern. JEL classication: R11, R14, R31
... The importance of the location concept in early literature sources has been traditionally linked with distance. The oldest literature dedicated to understanding interrelationships between location and transport includes von Thünen (1826), Launhardt (1882Launhardt ( , 1885, Weber (1929), Palander (1935, Lösch (1954), Dean (1938), Hoover (1937, Dunn (1954), Greenhut (1956), Isard (1956) and Lefeber (1958) who have contributed to the element of general location theory that also implicitly accounts for transport costs (Isard et al. 1998, Bertuglia et al. 2013. ...
... Some models aim to interpret firms' location choices on the assumption of punctiform final and raw materials markets with given locations. Other models seek to identify the market areas of firms, that is, the division of a spatial market among producers (Weber 1929, Greenhut 1956). Location equilibrium is determined by a logic of profit maximisation whereby each producer controls its market area (Lösch 1954, Hotelling 1929. ...
Bratislava, the capital city of Slovakia, is currently experiencing a period of intensive suburbanisation, which in turn creates demand pressures and increases the price of urban land located in its hinterland. This paper investigates several locational factors, which likely significantly influence the demand for land plots and modulate `price-maker' conditions. Based on the population sample of 102 units, the results indicate that built-in infrastructure facilities on land under analysis, advanced transport connectivity in municipalities, and various amenities in the municipality cadastre tend to elevate land prices significantly. Moreover, the factor of distance from the city of Bratislava plays a major role in household location, which was identified by the apparent decreasing rent gradient pattern.
... This implies both the firm and consumers to bear part of freight even under FOB mill pricing. See Greenhut (1956), and Ohta (1988) for more details on spatial pricing techniques and related analysis. 7 In a related vein uniform CIF pricing, under which mill price varies inversely with distance, is of particular importance, empirically as well as theoretically (a la Greenhut, 1956Greenhut, , 1981Kats-Thisse, 1993;Ohta-Lin-Naito, 2005, etc.), albeit-non-sequitur to the present inquiry. ...
... See Greenhut (1956), and Ohta (1988) for more details on spatial pricing techniques and related analysis. 7 In a related vein uniform CIF pricing, under which mill price varies inversely with distance, is of particular importance, empirically as well as theoretically (a la Greenhut, 1956Greenhut, , 1981Kats-Thisse, 1993;Ohta-Lin-Naito, 2005, etc.), albeit-non-sequitur to the present inquiry. ...
... works of von Thünen (1826), Weber (1929), and Lösch (1954). Renewed interest took hold in the middle decades of the 1900s in the work of Hoover (1948), McLaughlin and Robock (1949), Isard (1948) and Greenhut (1956). A common theme in this literature was a focus on empirically testing the theoretical determinants of the distribution and choice of industrial location. ...
... Profit maximization is often cited as the objective behind industrial location. Greenhut (1956), in one of the first works to extend Lösch's framework, describes a firm's location decision based upon a profit-maximization framework. According to Greenhut, firms choose a site from which there is sufficient demand (buyers) to achieve maximum sales served at the least possible cost. ...
The purpose of the paper is to test the long-run steady state of growth factors hypothesized to influence U.S. manufacturing investment flows. These factors include agglomeration, market structure, labor, infrastructure, and fiscal policy. Spatial cross-regressive and spatial Durbin models are used to measure the spatial interaction of investment flows. Spatial spillovers are found to be of a competitive nature at the state level, implying that a factor which attracts more investment to a particular state is associated with lower investments in neighboring states. Investment flows to states with higher market demand, more productive labor, and more localized agglomeration of manufacturing activity.
... Both models incorporated settlements and market areas around them. Losch's theory has been reworked into a functional model through spatial analysis techniques by Haggett (Haggett 1965), Greenhut (Greenhut 1967) and D.M. Smith. (Smith 1971) Walter Isard contributed to industrial location theory through his pioneering work in regional science. ...
This paper examines the effects of socioeconomic change on the evolution of functional regions in England and Wales between 1981 and 2001. It looks at how the rapid shift towards the knowledge economy has affected the clustering of industries and the interaction of labour markets for representative industrial sectors and occupational groups. These two streams of research are tied together to get an overview of how functional urban regions are changing. The first part of the analysis is centred upon capturing the shift from manufacturing to services. Spatial clustering patterns of economic activity are identified through measures of agglomeration developed within the field of economic geography. Regional trends are laid out by extracting the clustering distance for a sample of industries across England and Wales and in some of the major city regions. The second part of the analysis is focused on representing the changing nature of local and regional labour networks through journey-to-work flows. The focus of the analysis is the knowledge worker, who is portrayed in current socioeconomic literature as a major player in creating local and regional networks. This part of the analysis assesses the function of the knowledge worker as an agent for local and regional connectivity through an original visualisation of its commuting profile. This profile is then compared to other occupational groups for 1981 and 2001 to determine if there are any distinguishing patterns that emerge supporting the occupation's role in changing interactions within and amongst regions. The two parts of the analysis provide an overview of how recent socioeconomic changes have affected the nature and size of economic clusters and the intensity of flows within and between their functional regions. This provides a step forward in disentangling the socioeconomic forces behind the growing interdependence between cities and their regions in the knowledge economy. The main result of the first part of the analysis is that the representative industries for manufacturing and services have a contrasting spatial footprint in 1981 and 2001. The manufacturing sectors are spatially clustered at the local level whereas service employment is evenly distributed across a wide range of distances. Furthermore manufacturing activities have been disassociating themselves from other economic functions and forming independent clusters. The shift towards the service sector is increasing the size of economic activity areas and is fragmenting industrial clusters; leading to a different kind of spatial identity for city regions. The second part of the analysis demonstrates that as the economy has moved towards knowledge based sectors in 2001, the proportion of higher tier occupations within the labour market have increased. This has shifted the market in favour of knowledge workers. Whereas knowledge workers such as 'professionals', who appear at the top of the social hierarchy, have had access to jobs over a wider range of distances, thus expanding local and regional linkages; lower ranking occupations such as 'personal services' were employed at a restricted range of distances within close proximity to their homes. Whereas knowledge workers have been increasing the connectivity within and amongst regions, lower-level occupations have not been able to expand their journey-to-work flows, creating separate labour markets within the same city region. The combination of the two analyses on production and worker location variables yield insight on supply and demand factors in labour flow change across city regions. Although manufacturing and lower ranking jobs maintain the same 'bounded' spatial footprint, the more distributed pattern of service industries is coupled with a versatile occupational group creating a flexible functional region. As the share of manufacturing activity and its labour market decrease within the economy, Regions in the Knowledge Economy, Basak Demires Ozkul. Regional Studies Association European Conference May 2012 p. 2 the 'fuzzy' boundaries of service jobs and higher tier occupations create a more interconnected and flexible functional region; leaving the former locked within its own boundaries. These results are especially relevant in laying out how the knowledge economy in England and Wales has been creating exclusive spatial realities for different segments of the population.
... Posteriormente, os estudos como os de Hoover (1957), Greenhut (1956) e Isard (1968) aprofundaram a discussão de Von Thünen (1875) e Weber (1929), propondo novas metodologias. Contudo, essas teorias clássicas passaram a receber muitas críticas por causa da importância dada aos custos de transporte (Ballou, 2017). ...
A distribuição de produtos de e-commece apresenta na literatura uma lacuna no que diz respeito a modelos matemáticos que tratem dessa instância sob o enfoque de otimização combinatória de alocação em instalações multicapacitadas. Este estudo tem como objetivo desenvolver um modelo matemático de programação linear inteira, capaz de otimizar a localização e alocação de produtos provenientes de e-commerce. O método, para o desenvolvimento e aplicação do modelo, apoiou-se no estudo de caso de uma empresa que atua na venda de redes de descanso, presente no comércio eletrônico B2B (Bussiness to Consumers). Os principais resultados obtidos foram: uma média de otimização de 39,1% no cenário real da empresa, e a ausência de falhas na geração de relatórios no dia a dia de operação. Conclui-se que o modelo apresentou soluções consistentes e sugere-se que ele possa ser aplicado em instâncias similares, bem como incluído de novas características em estudos futuros.
... In the latter area, however, the total number of references is the fewest for any chapter in the MRA and the sole Southern work cited is Airov' s study of the synthetic fiber industry. In the location chapter, it would hardly have been possible for Isard to have avoided citing the work of Dunn (1952) and Greenhut (1956) McLaughlin and Robock, while giving recognition to less well-known papers by Shapiro and W. . Indeed, there is a great deal of Southern work in regional analysis published prior to the MRA that Isard either ignored or chose not to include in his references. ...
This paper reviews the development of regional analysis in the South in the pre-regional science era. It then examines the influence of that work on the early literature of regional science. An examination of the nature of Southern regional science in the past 25 years is included.
... It is presumed that the 1958 to 1963 change in interindustry relations was not of such a nature to affect the conclusions of our analysis. FOOTNOTES 'For example, Greenhut [3,104] has noted that, "of all the locating forces, the market factor is probably the most unique." Losch [6, 371] concluded that, "the pro duction of most goods is rather evenly distributed in respect to their sale." ...
The purpose of this paper is to report the results of a pilot study designed to answer two basic questions: (I) Can an alternative measure of market demand which specifically accounts for both final and intermediate markets be developed from existing data? (2) Does it make any difference? Or, more specifically, how does this new market measure compare with the traditional measures in terms of its power of explaining the location of industry? Briefly, the answers are yes, there exists sufficient data to develop an alternative, and we believe superior, measure of market demand and there is substantial evidence to suggest that traditional measures tend to understate the importance of market demand as a determinant of location.
... With this intraregional process in mind, sets of subregional and sitespecific location factors were posited. The plant location literature [4,12,26,30] and prehminary discussions with manufacturers, public offi ...
This paper reports on an application of the Delphi method to regional industrial land-use forecasting. It should be emphasized from the outset that the work documented should be considered no more than an “abbreviated” Delphi approach, for the study was continued through only two rounds and there was no effort to arrive at a stabilized consensus of opinion. Both the methodological and substantive findings of the research are thought to be important and, therefore, both are discussed in the Results section of the paper. Also, because methodology is a major concern of the paper, the way in which the Delphi approach was applied is described fully.
... Spatial voting models were first applied specifically to elections by Downs (1957) to study the relative positioning of political parties and voters using a spatial approach built on the pioneering work of Black (1948); Hotelling (1929); Lerner and Singer (1937); Smithies (1941) and Greenhut (1956), who addressed the problem of location between two competing firms in order to optimally choose their setting in a market of undifferentiated goods. Under a spatial model, it is assumed that both candidates and voters are placed in an unidimensional or multidimensional space according to the position they take or prefer on certain issues, each of which corresponds to a dimension. ...
Social choice theory provides a theoretical framework for analyzing how to combine individual opinions, preferences, interests or welfare so as to reach a collective decision. Social choice theory is one of the areas in economics that has seen a boom in simulations work using models based on the behavior of individuals involved in collective decision-making. The purpose of this paper is to offer to the uninitiated reader a methodological presentation of these different models, as well as the techniques for theoretical calculations and simulations, and then to report on recent developments concerning new models and advances in calculation techniques and simulations. This paper will thus give readers easy access to the models which, due to their complexity, might seem to be reserved for initiates. We take the opportunity to present and discuss the assumptions that support each of the models, and indicate how simulations may be helpful in analyzing complex problems in social choice theory.
... Besides traditional cost and demand factors (for a review, see Isard (1956)), institutional and other non-economic factors have played increasingly important roles in location decisions. Personal preferences on and hence personal satisfaction from the quality of life, social environment, weather, and landscape are significant determinants of where to open and operate a firm (Hoover, 1948;Greenhut, 1967;Richardson, 1969). Recognizing the critical role of personal factors, Tiebout (1957) stressed that small firms compared to their larger counterparts are more likely to be influenced by these non-pecuniary determinants. ...
This paper examines the effects of local taxes and local fiscal expenditures on small businesses in Florida. Our analysis sheds light on the linkage between small business development and local fiscal decisions, which seem to have no obvious or direct connection with targeted business assistance and incentives. Spatial panel regression models are calibrated with county-level tax, expenditure, and social and economic factors for the period of 2008-2013. The estimation results suggest that local tax and expenditure structure and decisions affect the number of small business establishments not only in their “home” counties but also in their neighboring jurisdictions.
... Barca, 2009) have neglected the role of manufacturing for achieving economic growth and the need to support its diffusion in peripheral economies through the production of new varieties of goods, as discussed in readings from new economic geography (Combes et al, 2008). Manufacturing and its spread in peripheries was emphasized for a long period in regional economics and economic geography to be a principal cause for peripheral growth and a reason for creating, sustaining, strengthening or even reversing core-periphery imbalances (Myrdal, 1957;Chapman and Walker, 1987;Weber, 1929;Hoover, 1948;Losch, 1954;Greenhut, 1956;Isard, 1956;Smith, 1971;Armstrong and Taylor, 1999;Pitfield, 1978;Needleman and Scott, 1964). ...
A sample of Greek SMEs selected from four regions having different levels of centrality/peripherality and five major industries of the Greek economy in the 1995 – 2002 period, representative of all levels of centrality/peripherality at the Greek economy, is used to test hundreds of cross-sectional models testing the association of SME logarithmic employment and turnover growth with proxies used for capital, labour, land, industrial infrastructure, policy support, firm size, manufacturing and distance from Athens. The significance of the last three factors revealed in the association of SME logarithmic employment growth, brings in mind the emphasis on microeconomic assumptions given in Krugman's 1991 core-periphery model and agrees with a discussion on core-periphery imbalances in Greece.
Few points that emphasize even further the significance of this text are a) the extended efforts to build hundreds of models before producing the final one, b) that such models have been tested for the whole economy, and, as such, resemble to general equilibrium models employed by Krugman (1991) that refer to the whole economy and have microeconomic foundations, and c) that the whole sample of SMEs could be grouped in two core-regions (Attiki and Kentriki Makedonia) and two peripheral (Thessaly and Ipeiros), and in that respect it resembles even further to Krugman's work. Furthermore, the sample tests significant manufacturing regions of Greece and could be divided to a manufacturing and a non-manufacturing sample, again resembling to Krugman’s original hypotheses tested, since the agricultural region tested by Krugman is supposed to be used as an explicit differentiation from a manufacturing region, acting as the peripheral region. Beside both Thessaly and Ipeiros are agricultural regions.
This text is available on-line by the journal. I am not that proud for the writing of my work because I had not revealed all points in the analysis and conclusions but both the structure of the analysis, and conclusions are worth considering and highlighting I believe. Further light should be shed on the matter. Recently I saw its use by Belluci et al. (2021) Venture Capitals in Europe, JCR Technical Report, EU Commission.
... In fact, market geographies are then better encapsulated as a reflection of income geographies than of sheer population counts. The market-area analysis school provides the economic underpinnings for a substantial theoretical body of knowledge on the processes of spatial organization of businesses in consumer-oriented industries (Greenhut, 1956), and of market places, retail districts, and of settlement centers into hierarchical systems (Christaller, 1933;Berry and Parr, 1988). The market-area approach continues to provide the tenets for applied research in retail location analysis (Ghosh and McLafferty, 1987), public facility planning (Thisse and Zoller, 1983;Church and Murray, 2009), and spatial and territorial planning (Von Böventer, 1965). ...
A commonly accepted definition of the concept of market area is that of the territory (or section of the geographic space) over which the entirety or majority of sales of a given good or service supplier takes place. It is the territorial expression of the supplier's clientele. The market area is much more than an ex post map depiction of a purely aspatial microeconomic process that defines customer–supplier relationships. In his 1870s work, the German economist Launhardt is credited for unveiling the novel idea that suppliers' success to sell their output in a market economy is shaped by considerations of transportation cost and position of competing suppliers one relative to another in a geographic space. The theory of market areas that grows out of his work emphasizes demand-oriented processes in shaping the spatial organization of economic systems and population settlements. Launhardt's pioneering ideas gave life to several research traditions in the social sciences. One emphasizes microeconomic processes and it is manifested in the seminal work of Christaller, Lösch, Greenhut, and others. A second research orientation is dedicated to the geometric characterization of market areas under alternative spatial behavioral and structural contexts. Third, the prescriptive approach looks at market areas as they ought to be delineated according to some system optimization criteria. Finally, revolving around the implied delineation of market areas through the social physics principle of spatial interaction, the fourth tradition has become a pillar of modern business geographics and spatial business intelligence. This article traces the roots of the concept of market area, the development of the four traditions outlined above, and discusses the relevance of the concept to modern social and behavioral sciences.
... colocation of companies from different industries), gave further impulses to the development of regional cluster theories (Porter, 1985). The works of Greenhut (1956) and Isard (1956) although focusing mainly on mathematical optimisation modelling of industry given the costs for transporting raw materials and final goods, argued that the business companies tend to locate near primary input sources, whereas the monetary weight of raw materials can be larger compared to the weight of the final goods. ...
Meanwhile, accessibility belongs to a major factor of the economic attractiveness of metropolitan areas, other territories and peripheral regions. The aviation industry in general and airports’ activities in particular contribute considerably to the improvement of regional accessibility. For some remote regions, the airports are the only gateway to bigger hubs. However, due to the increasing competition in the aviation sector, the airports and especially regional airports in Europe face structural and operational challenges nowadays. According to the report of the EU Commission: “The Future of the Transport Industry” the number of loss small and regional airports in Europe is constantly growing. On the other hand, regional airports might play a crucial role in boosting economic development and entrepreneurship growth in regions. In this context, it is very urgent for regional airports themselves, as well as for regional policymakers, businesses and other relevant stakeholders to recognise the role of regional airports in the economic growth in their regions. As a response, this paper addresses the evaluation and assessment of the potential effects of regional airports on economic and entrepreneurship growth in their regions
... La decisió d'on es pot ubicar una planta es pren considerant el conjunt de costos que representa localitzar-se en un lloc comparativament amb el conjunt de costos que representa ubicar-se en un lloc alternatiu. En general, s'estableix la combinació de factors productius específica de cada sector industrial i els costos respectius en punts alternatius; finalment, s'escull com a localització de la planta el punt on els costos totals es minimitzen (Isard, 1951(Isard, , 1956Greenhut, 1956Greenhut, , 1967Smith, 1966;Hamilton, 1971). ...
In human geography, the theory of localisation and, specifically, that of industrial localisation has been one of the most broadly covered issues over time, and is closely related to other disciplines. This article outlines the various contributions made in industrial localisation, from Weberian analysis up to the network economy, without forgoing a consideration of mass-production or Just-in-Time systems. Methodologically, the analysis of industrial localisation is framed within the structure of globalisation/regionalisation in which the economic activity of the 20th and 21st Centuries takes place. It also focuses on the impact on the productive system caused by innovation in areas such as technology, communication, infrastructures and business organisation, and how this has been reflected in industrial space.
... Many development policies need sites for the location of businesses. Businesses carefully consider land value, taxes, interdependence with market, transportation, and so on (Greenhut, 1967;Vogel, 2000). In order to locate businesses in their communities, local governments should have enough land that is equipped with a variety of desirable resources. ...
This paper explores which factors influence the degree to which cities apply performance agreements to constrain economic development incentives. By integrating the political bargaining and network approaches, insight is gained into how political bargaining based on networks can be applied to performance agreements and thus what factors influence their application. Development resources, circumstantial conditions, and organizational networks are hypothesized to influence performance agreements. The results confirm that development resources (such as physical resources, expertise and experience, size of businesses) dominantly influence the level of performance agreement application. However, this study finds that the priority of economic development in circumstantial conditions is also important to promote performance agreements.
... These factors have been grouped and discussed by numerous authors and researchers in a variety of ways. Many authors (Roudsari and Wong, 2014;Anand et al., 2012;Greenhut, 1959;Greenhut and Colberg, 1962;Dean, 1972;Nicholas, 1974;Spooner, 1974;Foster, 1977;Brown, 1979;Moriarty, 1980) emphasise the importance of critical demand factors (location of competitors, proximity to consumer markets, etc.), and cost factors (land, labour, materials, transportation, etc.) in their prescriptions for industrial location planning. The literature shows that these critical factors can be identified and analysed by the firm's decision makers in a better way therefore, the location decision-making process will improve and result in long-term performance for the organisation (Miller and Star, 1967;Weber, 1972;Walker, 1975;Saxenian, 1985). ...
Selection of plant location is a multi-person and multi-criteria decision problem. Location selection is a strategic decision that cannot be changed overnight. Even if the location decision is changed at all, a considerable loss is bound to be incurred. Without sound location planning in the beginning, the new facility may pose continuous operating disadvantages for the future operations. In this paper, analytic hierarchy process (AHP) approach is used to arrive at consensus decision. The AHP model is formulated and applied to a real case study to examine its feasibility in selecting the plant location for a manufacturing industry. Different factors were identified affecting the plant location on the five locations (Delhi, Manesar, Chandigarh, Mumbai and Baddi) suggested by a particular manufacturing industry and then AHP technique was implemented to select the best location out of these five locations. After analysis, Baddi is found to be the best location to setup their new plant. AHP is a powerful and flexible tool for tackling the complex decision problem into a simple concept of hierarchy, which incorporates both financial and non-financial factors influencing the decision alternatives in a systematic way.
... The localization of services was also dealt with by W. Sombart (1934) or W. J. Coffey and M. Polése (1989) who defined highly skilled workforce as the most important location factor. As a representative of a new theory of localization could, for example, be mentioned Greenhut (1959) who indentified three groups of location factors: demand, cost and personal. Another theory, which can be classified as newer is Alonso's (1964) theory dealing with the spatial organization of cities which shows that the most attractive place for business is in the city centre. ...
The main field of study regarding location theories is to define location factors and to determine the optimal location assuming rational behaviour of economic entities. The issue is to find outwhat place is suitable for localization of the economic entity in order to maximize its profits in relation to its spatial orientation. In the theoretical part, location theories for industry andservices with the impact of location factors are first briefly described. Mainly their development and significance in the competitive environment is discussed because the right selection of location factors can actually help to increase the competitiveness of regions. This paper analyses the actual soft regional and local location factors in individual economic sectors and focuses on thesecondary and tertiary sector because the primary sector is affected by other than the examined factors. The aim of this paper is to identify factors that affect industry and are more important to the service sector. Identifying these factors can actually help to attract new businesses and to increase regions competitiveness. It is, therefore, necessary to determine the key factors that have stimulating effects on the development of individual regions.
... Melvin Greenhut (1956) improved on Webber's work by addressing the emerging emphasis on demand factors as an in industrial location decisions. Greenhut argued that a locational decision must be based on demand factors, cost factors, and personal management factors. ...
... However, his theory failed to consider spatial cost variations, and over emphasised demand which in effect determined the location of producers ). As Greenhut (1956) indicated, the ideal system of location could be brought about only by State direction and is irrelevant to a competitive capitalist economy. ...
... Entre os novos fatores de localização considerados ao se descrever o comportamento locacional das indústrias modernas estão incentivos fiscais governamentais, mercados globais, criação de distritos industriais, proximidade de centros de ensino e pesquisa, disponibilidade de capital, cultura empreendedora, integração em redes, motivações pessoais dos empresários etc. (Greenhut, 1956;Schmenner, 1982;Azzoni, 1981). A introdução da noção de lucros psicológicos, ou renda psíquica, na teoria locacional enfatizou o valor de uma teoria de maximização da satisfação que superasse as limitações da abordagem baseada no homem econômico. ...
This article examines, in the light of the main theories of industrial location, the locational issues concerning technological incubators and high tech firms. First, it touches aspects of the Traditional Theory of Industrial Location and the main theoretical advances in relation to the seminal writings, trying to identify what are the most relevant factors to the creation and the development of high tech firms. Second, it investigates the relation between Brazilian high tech incubators and the milieu where they are found, trying to assess what are the most relevant factors that push the creation process and the development of such businesses. The data presented result from a national survey that included the totality of the high tech incubators in operation in the country and reflect the incubators managers’ point of view regarding the locational aspects of the businesses.
... Lambert e Stock (1998) apresentam uma expansão aos fatores de decisão sobre localização até então não tratados pelos demais autores e enfatizados por Greenhut (1956): meio ambiente e segurança. Já Schmenner (1982) propõe 8 etapas para a escolha de um ponto comercial: ...
Location is perceived as a vital aspect in the retail trade, but few studies address what the relevance
of the factors listed as important is. For each market sector, it is assumed that these factors result
in increased sales in different ways, and are based on the experience of each businessperson to decide where to locate their outlets. This study looks into those factors, using the same procedure
adopted by those businesspersons, yet with research methodological support by Pearson's correlation to the revenue magnitude. This drew an analytical foundation that provides directions for the
formulation of a methodological construct for future investigations of the relationship between location characteristics and business result. It may be concluded that some characteristics have a
strong correlation (positive or negative), while others are irrelevant to the specific location of drugstores. For other commercial activities, further research is needed to deepen the understanding of the
issues raised.
... Ένα άλλο συγγενές ρεύμα επικέντρωσε στη μελέτη της κατανομής των δραστηριοτήτων και της διαμόρφωσης των χρήσεων γης στον αστικό χώρο με χαρακτηριστικότερο παράδειγμα το μοντέλο του Alonso και 1964, βλ. επίσης Muth 1969, Vickerman 1984 Richardson 1972Richardson , Κώττης 1976Richardson , Κόνσολας 1970Richardson , 1974Richardson , 1983Richardson , ΕΜΠ 1973Richardson , Αργύρης 1985 (Krugman 1991, 1991a, Fujita et al. 1999 (Greenhut 1956, Rawstron 1958, McNee 1960, Smith 1966, Pred 1967, Krumme 1969, Hamilton 1971, Chapman 1974, Le Heron & Warr 1976, Hymer 1976, Gold 1980 (Myrdal 1957, Hirschman 1958, Perroux 1955, Friedmann 1966. Στο παρακάτω πλαίσιο (πλαίσιο 2) παρατίθεται το κεντρικό σκεπτικό της θεωρίας συσσωρευστικής αιτιότητας του Myrdal (1957). ...
... The firm does this by minimizing the transportation costs of shipping input supplies to the firm and maximizing the potential market demand for their good or service. In other words, the profit maximization approach to location decisions declares that businesses select the site from which the number of buyers whose purchases are required for maximum sales can be served at the least possible total cost (Greenhut, 1956;McCann, 2002). This site need not be the lowest total cost site possible, but rather a site from which monopolistic control over buyers makes this site more profitable than a lower cost site. ...
Forests provide a broad economic basis for rural communities throughout the Northeastern United States. Contemporary resource management and rural development planning increasingly emphasize the integration of raw material production with forward-linked processing activities. Furthermore, the tacit acceptance of joint production of both wood and amenity-based recreation often pits the forward linked sectors of wood processing and tourism against one another as development strategies. Empirical studies suggest that both wood processors and tourism businesses locate proximate to forest resources. Assessing the regional firm location decisions of wood processors has raised important and complex issues of sectoral heterogeneity and regional economic performance. This study addresses the question of the relative importance of alternative forest uses in supporting rural economic vitality. Specifically, we initiate analysis of firm location in three wood processing sub-sectors through descriptive location quotients of primary, secondary, and reconstituted wood products manufacturing sectors and compare the presence of tourism sector activity to that of the timber sector. Explanatory variables that support these sectoral specific location quotients include proxies for raw material inputs and output markets. Our work on rural resource dependency expands this into metrics associated with income, unemployment, poverty, and regional economic diversity. Results suggest that important differences exist in locational dependency attributes between wood products sub-sectors and that dependence on joint forest resource outputs is clearly associated with unique attributes of regional socioeconomic structure.
... As Harris was writing, a new and powerful influence on industrial geography was emerging from the writings of regional economists such as Isard and Greenhut (Isard, 1956, Greenhut, 1956. Industrial complex analysis was a major contribution (Isard, Schooler and Vietorisz, 1959). ...
Some immediate reactions when asked to write a review of the past half cen- tury of industrial geography were about how well would my memory serve me, how wide a net to cast, and if 50 years is an acceptable time frame. I began by outlining what I remember of my per- sonal experiences in the field. Then I wrote to many industrial geographers, some of my acquaintance and some I knew only by their contributions to the literature or membership in the eco- nomic geography group of the Associa- tion of American Geographers, and asked for their perspectives and re- membrances of the course of industrial geography over the past few decades. Several answered, and their responses have helped shape the narrative that follows. I next consulted a variety of sources, including reviews others have written, and textbooks that could re- flect both the changes and the enduring themes.
... There was indeed little critical connotation in identifying relatively self-contained economic territories. It might perhaps be something more homological to marketarea analysis a© la Melvin Greenhut (1956), central-place theory, or neoclassical shift-share analysis with more empirical than mathematical sophistication. ...
In Japan, critical geography has been practised for eight decades: since the 1920s when poverty and the miserable condition of labour and peasants instigated Japanese social scientists to adopt Marxism. The critical heritage began with importing works by German Marxist and soviet scholars, followed by criticism of the geopolitical ideologies that supported the militarist regime and the war of aggression. Besides them, the general orientation of critical geography before World War 2 remained mainly exceptionalist. Critical geographers gained momentum in the course of the democratisation process after World War 2, and they consolidated themselves by forming one of the earliest alternative organisations of geography, the Japan Association of Economic Geographers. Although the trend of exceptionalism persisted, some attempts to theorise critical geography emerged in the late 1960s to early 1970s. Noboru Ueno's work Chishigaku no Genten (The ultimate origin of chorography) (1972, Taimeido, Tokyo), for example, integrated the tenets of Marxism and phenomenology into a theoretical body of Marxist chorography that dealt with alienation of the indigenous fishers from the neighbouring sea, which was polluted with mercury from industrial waste. Yet, the advent of Toshifumi Yada's chiiki kozo ron (theory of regional structure) in 1973 (see Yada, 1990 Chiiki Kozo no Riron [The theory of regional structure] Mineruba Shobo, Kyoto) and its subsequent domination in the circle of once-critical geographers of a younger generation shattered further development of the critical heritage. The general orientation of geographers in Japan has become much more conservative and lost the intellectual power to come to terms with the growing critical trend among international geographers. At the same time, Japanese social scientists outside geography started to adopt the conceptions of critical geography developed abroad, bypassing the Japanese geographers' circle. It was not until the early 1990s that a group of critically minded geographers set out their endeavour to revitalise the critical heritage of geography afresh, to create their own conceptions of critical geography in close association with an international group of critical geographers.
This introductory chapter argues for the potential of management geography in relation to two distinct disciplines of social sciences—management studies, which is rather new and mainly consists of organizational and strategic analyses, and economic geography, which involves the study of the spatial characteristics of a variety of economic-related actors ranging from local to global scales. With the globalization of firm activities, an increasing number of economic geographers have begun paying attention to the management of economic entities, particularly multinational enterprises (MNEs). In addition, as firms have recognized the importance of creating knowledge for innovation, academics have started investigating the knowledge economy, that is, the meaning of knowledge and relationships between knowledge creation and innovation. Economic geographers have been tackling management issues in the context of the spatial features of firm activities. This book is an attempt to launch management geography through the perspectives of Asian countries, especially Japan, which is significant in the global economy and has not been much investigated in geography in the literature in English.KeywordsManagement geographyEconomic geographyManagement studiesKnowledge economyJapan
For Humanitarian Logistics (HL), the management of supplies cannot be improvised at the time of an emergency. However, it must be incorporated as a planned activity. Organizations that attend emergencies constitute a chain whose segments are closely linked and where the management of each of them has an impact on the results of the others. This research has as its first the location of the municipalities where they can be established Regional Humanitarian Response Depot (RHRD) for the distribution of aid kits in the seven regions in which the State of Puebla is formed because each of these areas is exposed to both hydrometeorological and geological risks, which affect the general population. Therefore, it is mentioned that a location model was used, based on the Weber Problem, and that it is known as Attraction and Rejection, which aims to find desirable locations, rejecting the risk of a wrong location. This method was able to locate municipalities that meet both minimum distance conditions as well as risk reduction and consider them as feasible to host the RHRD.KeywordsHumanitarian logisticsRegional Humanitarian Response Depot (RHRD)Weber problemAttraction and rejectionRisk reduction
Export tax policy is one of the most debated issues in many developing countries. Those countries with strong natural advantages in the production of primary commodities, such as agricultural and livestock products, coffee, jute, rubber, and others, have attained at particular times a position as dominant suppliers in international trade. They have often used export taxes on those commodities to obtain foreign exchange and/or government tax revenues. This paper provides a normative analysis to examine how the inclusion of economic space affects export tax policy and to compare optimal export taxes under endogenous location with optimal export taxes under exogenous location, both in the short run and in the long run.
The present study proposes a validation of a mathematical index Q able to identify optimal geographic places for economic activities, solely based on the location variable. This research work takes its roots in the 1970s with the statistical analysis of spatial patterns, or analysis of point processes, whose main goal is to understand if a resulting spatial distribution of points is due to chance or not. Indeed point objects are commonplace (towns in regions, plants in the landscape, galaxies in space, shops in towns) and the development of specific mathematical tools
are useful to understand their own location processes. Spatial point deviations from purely random configurations may be analyzed either by quadrat or by distance methods. An interesting method of the second category – the cumulative function M – was developed recently for evaluating the relative geographic concentration and co-location of industries in a nonhomogeneous spatial framework. On this basis, and having quantified retail store interactions, the French physicist Pablo Jensen elaborated the Q-index to automatically detect promising locations. To test the relevance of this quality index, Jensen used location data from 2003 and 2005 for bakeries in the city of Lyon and discovered that between these two years, shops having closed were located on significantly lower quality sites. Here, using bankruptcy data provided by the Registrar of companies of the State of Valais in Switzerland and by the City Council of Glasgow in Scotland, we implemented a method based on univariate logistic regressions to
systematically test for the relevance of the Q-index on the many commercial categories available.
We show that the Q-index is reliable, although significance tests did not reach stringent levels. Access to trustable bankruptcy data remains a difficult task.
What regional science did most for geography was to provide a forum for the ideas and methodologies of scientific human geographers that were not and are apparently still not acceptable to a large number of geographers. Scientific geographers’ ideas and methods of analysis were and are accepted in regional science because many other practitioners of regional science are interested in the same ideas and methods. Thus, there exists a reciprocal appreciation between scientific geographers and practitioners of other disciplines interested in regional science.
The objective of this paper is to present a case study of applied location economics-the optimal location of fuel alcohol plants in the Philippines.
Functional regions in England and Wales changed considerably between
1981 and 2001 due to major socio-economic changes. The rapid shift
towards the knowledge economy has affected the clustering of industries
and the interaction of labor markets for representative industrial sectors
and occupational groups. This paper combines research on industrial sectors
and occupational groups to get an overview of how functional urban
regions are changing. The first part of the analysis is centered upon capturing
the shift from manufacturing to services. Spatial clustering patterns of
economic activity are identified through measures of agglomeration developed
within the field of economic geography. Regional trends are laid
out by extracting the clustering distance for a sample of industries across
England and Wales and in some of the major city regions. The second
part of the analysis is focused on representing the changing nature of local
and regional labor networks through journey-to-work flows. The focus
of the analysis is the knowledge worker, who is portrayed in current
socio-economic literature as a major player in creating local and regional
networks. This part of the analysis assesses the function of the knowledge
worker as an agent for local and regional connectivity through an original
visualisation of this figure’s commuting profile. This profile is then compared
to other occupational groups for 1981 and 2001 to determine if any
distinguishing patterns supporting the occupation’s role in changing interactions
within and amongst regions emerge. The two parts of the analysis
provide an overview of how recent socio-economic changes have affected
the nature and size of economic clusters and the intensity of flows within and between their functional regions. This provides a step forward in disentangling
the socio-economic forces behind the growing interdependence
between cities and their regions in the knowledge economy.
The analysis on production and worker location variables yields insight
on supply and demand factors in labor flow change across city regions. Although
manufacturing and lower-ranking jobs maintain the same «bounded
» spatial footprint, the more distributed pattern of service industries is
coupled with a versatile occupational group, creating a flexible functional
region. As the share of manufacturing activity and its labor market decrease
within the economy, the «fuzzy» boundaries of service jobs and higher-tier
occupations create a more interconnected and flexible functional region,
leaving the former locked within its own boundaries. These results are especially
relevant in laying out how the knowledge economy in England and
Wales has been creating exclusive spatial realities for different segments of
the population.
Information and communication technologies (ICTs) open up new possibilities for development in rural and mountain areas. ICTs are analysed as a factor attracting business and enabling a dispersion of economic activity that is usually concentrated in metropolitan areas. Rural and mountain areas have benefited from the increasing incorporation of ICT in companies because development strategies are now made viable, thus bringing local territories into global markets and vice versa. Competitiveness and the added value of local development companies are incorporated into the product through the value given to local identity factors. Other competitive localisation factors of these zones are lower localisation costs and spatial loyalty among companies in the cluster. On the other hand, there may be an a priori shortage of available skilled workers in these particular areas but this deficit could be balanced out by the small size of companies established in these zones. This paper describes several case studies of specific companies in the Catalan Pyrenees where parts of the productive process with the highest added value—like design, organisation, etc—are carried out, while manufacturing occurs in other countries. It also analyses activities and services offered by smart farms and in smart rural areas. ICTs are important for the educational and informative levels of the population and also for the establishment of new companies and services in rural and mountain areas.
Spatial economics has as its remit the study of the use of a finite resource — space. It takes explicit account of the twin facts that economic activities both consume space and are separated by distance. Two principal sets of questions are addressed: how economic agents of various types choose their locations in a spatially extensive economy, and how the market areas of these agents are determined.
This thesis identifies the mechanisms governing the spatial changes in Korea's
industry and labour markets by focusing upon the emergence of the country's large
conglomerate business organisations (chaebols). As the country has distinctive
industrial organisations, production systems, labour processes and governmentbusiness
relations, this study discusses the relevance of existing models to the Korean
situation. It perceives the Korean economy as a system within which 'spaceorganising',
large business organisations interact over time with government, smaller
firms and multinational corporations at different geographical scales. The usefulness
of this approach is assessed using a case study of Korea's most representative
chaebol, the Samsung Group.
This study identifies chaebols as the dominant institutions in Korean society.
Their growth and business strategies have been controlled by the Korean Government
through its power to allocate capital resources. Regional dynamics of industry and
labour, therefore, have been strongly influenced by changes in the location, industrial
structure, production system and labour process of chaebols. With economic power
concentrated within a few giant business groups and their major areas of operation
restricted, unbalanced regional development has resulted. Dissatisfaction from
residents in less-developed areas has pressured the Government to advise chaebols to
disperse their production facilities.
Most small and medium-sized firms are closely linked to large corporations
through subcontracting. By forming hierarchical subcontracting systems, chaebols
have indirectly exploited scattered, part-time, home-based, female and lower-paid
labourers organised by subcontractors. Further, chaebols have expanded their
business arena to encompass overseas locations in a bid to overcome the problem of a
small domestic market, trade regulations and increased labour costs. Through their
international business networks Korea's local and regional economies are integrated
into the world economy. Indeed, the identification of the changing relationships of
chaebols with both the Korean Government and smaller firms is the key to explaining
the nation's spatial dynamics of industry and labour.
This paper outlines the main theoretical approaches to the role of transport in spatial organization and investigates possible new extensions at a theoretical and practical level, focusing on the analysis of transport cost. Beginning from the traditional theories of spatial distribution and the location of economic activities under transport cost, the analysis focuses on the related approaches of the new economic geography, which are based on the assumptions of the known “iceberg cost”. After that, through the presentation of indicative empirical studies, the paper attempts to clarify new issues that should be taken into account in the relevant theoretical considerations as well as in the political practice. Thus, factors such as the change of production structure in the modern economies with the production of more quality products, lower mass, and higher relative value and intangible goods, in combination with the improved transport technology, have contributed to a continuous reduction of the transport cost of raw materials and productive goods over the years. These developments along with the growing importance of cost of moving people should be taken into account in the new theoretical interrogations and the political practice of regional and urban development
The second edition of this book is completely reedited making the book even more valuable for graduate students, reflecting recent advances and adding insightful new material.
The book is about the analysis of regional economic performance and change, and how analysis integrates with strategies for local and regional economic development policy and planning. First, the book provides the reader with an overview of key theoretical and conceptual contexts within which the economic development process takes place. However, the deliberate emphasis is to provide the reader with an account of quantitative and qualitative approaches to regional economic analysis and of old and new strategic frameworks for formulating regional economic development planning.
The second edition brings to the present its original thesis about the need for regions to be fast and flexible, but also to be proactive in order to be prepared to experience increasingly greater shocks while having less time to adjust their economic development to achieve sustainability. This is underscored by events that have occurred since 2001: 9/11 terrorist attacks, continuing rapid advances in technology, the rise China and India, the Tsunami, and all the known on-going and unforeseen risks and challenges that confront nations around the globe and the regions and localities within them. The book presents strategies and the traditional and expanded methods used to create and implement them.
Los puertos secos se conciben como solución a la situación de creciente congestión de las rutas y escasez de espacios libres en las instalaciones marítimas, así como para reducir el importante impacto medioambiental de los puertos marítimos. Además, los puertos secos se presentan también como una oportunidad para fortalecer las soluciones intermodales como parte de una cadena integrada de transporte más sostenible. Sin embargo, su inclusión en el territorio conlleva también algunos impactos tanto en el medio natural como en el medio urbano. El objetivo de esta investigación es evaluar la sostenibilidad de las localizaciones de los actuales puertos secos mediante una metodología basada en el uso de Redes Bayesianas y Sistemas de Información Geográfica. Con los pesos del cuestionario DELPHI, los datos extraídos de la red y la información geográfica de cada variable, se analiza la sostenibilidad de cada ubicación utilizando un Método de Transparencias de Mc Harg.
In this thesis, I attempt to construct a conceptual and computational framework for studying firm clustering at intrametropolitan level. Specifically, this framework includes methods of measuring general industry clustering, detecting sized urbanization clusters and localization clusters, interrelating firm clustering with firms' characteristics and interpreting the appearance of firm clusters at a location with its spatial settings. I apply these methods with firm establishment data to study the patterns and determinants of firm clustering within metropolitan Boston. At the first time, these studies enable us to locate urbanization clusters and localization clusters in a metropolitan area and examine their association with economic and spatial explanting factors, which provides a completely new perspective of observing those spatial economical phenomenons like agglomeration and suburbanization and makes a solid step towards empirical modeling and understanding of them at the micro-level. As demonstrated in this thesis, clustering of firms or employments both end up with significant concentration of employment at some spots with specific attributes. This enables regional planners and policy-makers to apply some findings from this study in improving existing firm clustering patterns or incubating new firm concentrations, which ultimately promote local employment and improve local economics.
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