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Those U.S. firms that have factories just outside the United States/Mexican border in areas that have been specially designated by the Mexican government. In such areas, factories cheaply assemble goods for export back into the United States.

Industrial Revolution

the change from an agricultural to an industrial society and from home manufacturing to factory production, especially the one that took place in England from about 1750 to about 1850.

Commodity Chair

Series of links connecting the many places of production and distribution and resulting in a commodity that is then exchanged on the world market.

Fordist Production

Form of mass production in which each worker is assigned one specific task to perform repeatedly. (Assembly Line)

Post Fordist Production

World economic system characterized by a more flexible set of production practices in which goods are not mass-produced; instead, productions has been accelerated and dispersed around the globe by multinational companies that shift production, outsourcing it around the world and bringing places closer together in time and space than would have been imaginable at the beginning of the twentieth century.

Situation Factors

Location factors related to the transportation of materials into and from a factory.

Site Factors

Location factors related to the costs of factors of production inside the plant, such as land, labor, and capital.

Spatially Variable Costs

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

Spatially Fixed Costs

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

Bulk Reducing Industry

An industry in which the final product weighs less or comprises a lower volume than the inputs.

Bulk Gaining Industry

An industry in which the final product weighs more or has a greater volume than the inputs.

Break of Bulk Point

A location where transfer is possible from one mode of transportation to another. i.e. a steel mill near the port of Baltimore receives iron ore by ship from South AMerica and coal by train from Appalachia.

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

Market Orientation

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

Footloose Industries

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

Substitution Principle

Principle that maintains that the correct location of a production facility is where the net profit is the greatest. Therefore in industry, there is a tendency to substitute one factor of production (e.g., labor) for another (e.g., capital for automated equipment) in order to achieve optimum plant location.

Labor-Intensive Industry

An industry for which labor costs comprises a high percentage of total expenses


A process involving the clustering or concentrating of people or activities. The term often refers to manufacturing plants and businesses that benefit from close proximity because they share skilled-labor pools and technological and financial amenities.

Agglomeration Economy

(syn: external economies) The savings to an individual enterprise derived from locational association with a cluster of other similar economic activities, such as other factories or retail stores.

High- Tech Corridor

Areas along or near major transportation arteries that are devoted to the research, development and sale of high-technology products. These areas develop because of the networking and synergistic advantages of concentrating high-tchnology enterprises in close proximity to one another. "Silicon Valley" is a prime example.


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

Locational Interdependence

Theory developed by economist Harold Hotelling that suggests competitors, in trying to maximize sales, will seek to constrain each other's territory as much as possible which will therefore lead them to locate adjacent to one another in the middle of their collective customer base.


The process of deconcentration; the location of industrial or other activities away from established agglomerations in response to growing costs of congestion, competition, and regulation.


process by which companies move industrial jobs to other regions with cheaper labor, leaving the region to switch to a service economy and to work through a period of high unemployment

Cottage Industry

Manufacturing based in homes rather than in a factory, commonly found before the Industrial Revolution.

Guild Industry

A traditional type of manufacturing in the pre-industrial revolution era, involving handmade goods of high quality manufactured by highly skilled artisans who resided in towns and cities.

New International Division of Labor

Transfer of some types of jobs, especially those requiring low-paid less skilled workers, from more developed to less developed countries.

Structural Adjustments

Economic policies imposed on less developed countries by international agencies to create conditions encouraging international trade, such s raising taxes, reducing government spending, controlling inflation, selling publicly owned utilities to private corporations, and charging citizens for more services.


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

NGOs Non-Government Organizations

Non-Governmental Organization - Private voluntary charity organizations, independent from government control, and not trying to challenge government


The purchasing of services or products, such as the parts used in manufacturing a motor vehicle, from an outside supplier or manufacturer in order to cut costs

Alfred Weber theory of "least cost"

a theory of industrial location in which an industry is located where the transportation costs of raw materials and final product is a minimum

Black West Effect


Right-to-Work State

A U.S. state that has passed a law preventing a union and company from negotiating a contract that requires workers to join a union as a condition of employment.

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