The study of how firms determine where to locate their industrial activities, and the factors that influence these decisions.
Agglomeration: The concentration of economic activity in a certain location, resulting in economic benefits.
Cluster analysis: A statistical technique used to identify groups of related economic activities or industries.
Comparative advantage: When a country or region specializes in producing goods or services that they have an advantage in producing.
Industrial districts: A geographic area where firms within a similar industry cluster together.
Footloose industries: Industries that are not tied to a specific geographic location and can easily move if the economic incentives are high enough.
Infrastructure: The physical and organizational structures needed for the operation of an industry, such as transportation, communication, and utilities.
Land use planning: The process of allocating land for specific uses, such as residential, commercial, or industrial purposes.
Location quotient: A statistical measure used to determine if a particular industry is over or underrepresented in a specific geographic area.
Market access: The ease of access to customers, suppliers, and markets.
Regional development: The promotion of economic growth and development within a specific geographic region.
Spatial clustering: The geographic concentration of firms in a certain location.
Special economic zones: Designated geographic areas with special economic and regulatory policies to attract investment and promote economic development.
Trade area analysis: The process of analyzing the geographic area from which a business or industry draws its customers.
Transportation costs: The costs associated with moving goods and materials from one location to another.
Urbanization: The process of population growth and concentration in urban areas.
Weber’s Least Cost Theory: According to this theory, industries locate themselves where the costs of transportation, labor, and raw materials are at a minimum.
Von Thünen's (Johann Heinrich) Theory of Agricultural Location: This theory suggests that farmers choose to cultivate crops based on the proximity to the market and the cost of transportation of these crops to the market.
Christaller's Central Place Theory: This theory focuses on how different settlements and towns are distributed, based on their function, size, and services. It proposes that central places (cities) will cluster around the center of the region they serve.
Hotelling’s Theory of Spatial Competition: This theory suggests that businesses will locate strategically to optimize their market share in a particular area, minimizing the distance between them and their consumers as much as possible.
Locational Interdependence Theory: This theory indicates that a particular industry’s location choice will influence future location choices of other industries, leading to an interdependent network of industrial locations.
Product Life Cycle Theory: This theory explores how industries are affected by their products' different stages of development, with location choices being influenced by shifts in consumer demand and production costs.
Porter's Competitive Advantage Theory: This theory highlights how firms’ competitive advantage is influenced by location factors such as infrastructure, access to skilled labor, and available resources.