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Alfred Weber

German geographer who was a major theorists of industrial location. He devised a model of how to understand industrial locations in regard to several factors, including labor supply, markets, resource location, and transpiration.


grouping together of many firms from the same industry in a single area for collective or cooperative use of infrastructure and sharing of labor resources

Asian tigers/ asian dragons

Hong Kong, Singapore, Taiwan, South Korea

Backwash effect

the negative effects on one region that result from economic growth within another region

Big Mac index

provides a test of the extent to which market exchange rates result in goods costing the same in different countries

Classical liberalism

competitive individuals, limited government, free enterprise

Comparative advantage

the ability to produce a good at a lower opportunity cost than another producer

conglomerate corporations

When multiple corporations merge to make a larger one.


the dispersal of an industry that formerly existed in an established agglomeration


A process of improvement in the material conditions of people through diffusion of knowledge and technology.

development gap

the widening difference between development levels in MDCs and LDCs

dependency theory

a model of economic and social development that explains global inequality in terms of the historical exploitation of poor nations by rich ones


system by which goods and services are produced and distributed to meet people's needs

export processing zones

zones established by many countries in the periphery and semi-periphery where they offer favorable tax, regulatory, and trade arrangements to attract foreign trade and investment

free trade

the removal of trade barriers so that goods can flow freely between countries

fair trade

products are made and traded according to standards that protect workers and small businesses in LDCs

foreign direct investment

Investment made by a foreign company in the economy of another country.

gender empowerment index

compares the ability of women and men to participate in economic and political decision making

gender-related development index

Compares the level of development of women with that of both sexes.


The trend toward increased cultural and economic connectedness between people, businesses, and organizations throughout the world.

Gross Domestic Product

the dollar amount of all final goods and services produced within a country's borders in a year.

ford/fordist production method

manufacturing process broken down into differentiated components, with different groups of people performing different tasks to complete the product.

footloose industries

Industries that are able to shift the location of their facilities in order to take advantage of cheap labor.

foreign direct investment

Investment made by a foreign company in the economy of another country.

Friedrich hayek

This Austrian economist believed in limited government involvement in the economy.

Human development index

Indicator of level of development for each country, constructed by United Nations, combining income, literacy, education, and life expectancy

High tech corridor

An area along a limited-access highway that houses offices and other services associated with high-tech industries


the development of industries for the machine production of goods


an increase in the overall level of prices in the economy

informal sector

the portion of an economy largely outside government control in which employees work without contracts or benefits

International trade

trade between nations

international monitary fund

a United Nations agency to promote trade by increasing the exchange stability of the major currencies

Keynesian economics

Theory based on the principles of John Maynard Keynes, stating that government spending should increase during business slumps and be curbed during booms.

Least cost theory

Model developed by Alfred Weber according to which the location of manufacturing establishments is determined by the minimization of three critical expenses: labor, transportation, and agglomeration.

Less developed country

poorer countries that do not manufacture as many of their goods as more developed countries.

literacy rate

percentage of people who can read and write

locational interdependence

Location decisions based on decisions made by competitors

market orientation

The tendency of an economic activity to locate close to its market; a reflection of large and variable distribution costs.

material orientation

The tendency of an economic activity to locate near or at its source of raw material; this is experienced when material costs are highly variable spatially and/or represent a significant share of total costs.

modernization model

Model of economic development that shows that all countries go through five stages of development

multinational corporation

a large business that operates in many countries

multiplier effect

expansion of economic activity caused by the growth or introduction of another economic activity

north-south gap

a socio-economic and political division that exists between the wealthy developed countries, known collectively as "the North", and the poorer developing countries (least developed countries), or "the South."

pacific rim economic region

Far Eastern countries and markets bordering the Pacific Ocean, including Hong Kong, South Korea, Singapore, Taiwan, China, Malaysia, Indonesia, the Philippines, New Zealand, and Australia. Previously termed an economic miracle, Pacific Rim markets collapsed in the late 1990s.


the ratio of the quantity and quality of units produced to the labor per unit of time


To change from government or public ownership or control to private ownership or control.

purchasing power parity

a theory of exchange rates whereby a unit of any given currency should be able to buy the same quantity of goods in all countries


payment for damages after a war

secondary sector

the part of the economy that transforms raw materials into manufactured goods


the ability to fulfill all of one's needs without assistance.

spatially variable costs

an input cost in manufacturing that changes significantly from place to place in its total amount and in its relative share of total costs

spatially fixed costs

An input cost in manufacturing that remains constant wherever production is located.

special economic zones

The specific area within a country in which tax incentives and less stringent environmental regulations are implemented to attract foreign business.

structural adjustment program

a program to reform the structure of an economy

structuralist theories

This is when structuralists have argued that LDCs are locked into a cycle of underdevelopment by the global economic system.

structural adjustments

Stipulations that require the country receiving an international loan to make economic changes in order to use the loan

substitution principle

In industry, the tendency to substitute one factor of production for another in order to achieve optimum plant location.

sustainable development

Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.


Centers or nodes of high-technology research and activity around which a high-technology corridor is sometimes established.

tertiary sector

the part of the economy that involves services rather than goods

transnational corporations

large corporations that are headquartered in one country but sell and produce goods and services in many countries


A country that has progressed relatively far along a continuum of development

value added

the gross value of the product minus the costs of raw materials and energy.

quarternary economic activity

economic activity that focuses on the acqusision, processing and sharing of infomation, such as eduction or research

Quinary economic activity

service sector industries that require a high level of specialized knowledge skill (scientific research, high-level management)

walt rostow

One of the most influential modernization theorists, charted the route from traditional society to 'the age of high mass consumption', The Stages of Economic Growth

world bank

a United Nations agency created to assist developing nations by loans guaranteed by member governments

core periphery

Core countries have high levels of development, a capacity at innovation and a convergence of trade flows. Periphery countries usually have less development and are poorer countries.

dependency school

A school of thought that explains low development as being a result of the LDCs economic dependency on the MDCs.

economic indicators

Statistics that provide information about the performance of the economy and its position in the business cycle.

import substitution

a government policy that uses trade restrictions and subsidies to encourage domestic production of manufactured goods


continuing dependence of former colonies on foreign countries

neoliberal counterrevolution

The 1980s school of development emphasizing free-market approaches and participation in global trade.

polarization effects

The forces of concentration that reinforce growth at the core in expense of the periphery.

spread effects

the positive impacts on a region of the economic growth of some other region.

structural change

A shift in the relative share of national output and employment that is attributed to each business sector.

technology transfer

The communication of specific plans, designs, or educational programs necessary for the use of new technologies from one society or class to another. (p. 358)

transition economy

Planned economy moving towards more market oriented system

appropriate technology

The technology old or new that best fits the society using it

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