45 terms


Bid Rent Theory
Def. Explains one pattern of urban land-use in which commerce is willing to pay the greatest rent to be located in the Central Business District (CBD).
Sig. Firms benefit from agglomeration and it's
accessible for a large population. Therefore, firms "outbid" farmers and dwellers to occupy
Break-of-bulk Point
Def. The point at which the cargo mode of
transportation is changed to another mode
(e.g. a shift from truck to train)
Ex. Baltimore steel firm locates by the port
where it gets iron ore by ship from South
America & coal from the Appalachia by
Def: The decline of industry in the core as
firms relocate to the periphery
Ex: the rust belt has high unemployment
leading many to migrate to the sunbelt
Industrial Location Theories
Def: An industry will locate where it can
minimize its costs and maximize its profits.
• Ex: Weber's least-cost theory
Industrial Revolution
Def: A series of improvements in industrial
technology (e.g. steam engine) that
transformed the process manufacturing &
transporting goods.
Sig. England was the first to industrialize in
the late 18th century. The US and Western
Europe followed during the mid to late 19th
century (initial advantage)
Def: an increase of interaction among nations
encouraged by international organizations
(e.g. IMF & WTO) and transnational
Sig: greater interdependency and cultural
Growth poles
Def: An economic hotspot that spurs
additional industry such as the auto industry
in Detroit (cumulative causation).
Sig: Governments often try to artificially
create cumulative causation (France'
Least-cost Theory
Def: Alfred Weber considered labor costs (1),
transportation costs (2) & the benefits of
agglomeration/cost of agglomeration
diseconomies (3)
Sig: The rise of maquiladoras can be
explained by their proximity to US markets,
lower labor costs & agglomeration
Market Dependent Industry
Def. An industry in which the product gains
volume or weight during production (e.g.
soft drink)
Ex. These firms would then locate near the
market to minimize transportation costs
(AKA market-oriented or bulk-gaining
Resource Dependent Industry
Def. An industry in which the final product
weighs less or comprises a lower volume
than the input (e.g. steel)
Ex. These firms would then locate near the
resources to minimize transportation costs,
e.g. iron ore mine (AKA resource-oriented
or Bulk-reducing Industry)
Agglomeration Economies
Def. When many firms from one industry
locate in the same region to "share" labor
pools, office parks, and R&D (technology
Sig. It spurs growth for the region through
cumulative causation by attracting
backward linkages, forward linkages, &
ancillary industries.
Ancillary Industries
Def. Businesses that assist firms in a key
industry (e.g. Repair shops, security,
Sig. they appear in greater numbers when
firms agglomerate (part of cumulative
Backward Linkage
Def. Firms move in to support the initial
industry with components and supplies
Sig. part of cumulative causation
Backwash Effect
Def. The negative spiral for the periphery due
to job seekers and firms going to the core to
benefit from its agglomeration (e.g. brain
Ex. It's a negative result of cumulative
Canadian industrial heartland
Heartland: St. Lawrence Valley in
Southeastern Canada along the US border.
Sig. Abundance of raw materials and it'
close to major markets.
Carrier Efficiency
The positive and negative attributes of
different methods of transportation (Ship,
air, truck, or rail)
- Air - all distances; quick, but expensive
- Truck - short distance
- Rail - long distance, inexpensive
- Ship - long distance, cheapest
Cottage Industry
Def: Manufacturing based in homes rather
than in a factory (commonly found before
the Industrial Revolution)
Ex: English textile industry (as late as the 19th
Cumulative Causation
Def: The spiraling buildup of advantages in
certain places (initial advantage leads to
more advantages)
Ex: An initial industry will attract other
industries (agglomeration effect)
Def: The movement of industry away from
areas of concentration when it gets too
expensive (diseconomies of scale).
Ex: the deindustrialization of the Detroit &
Pittsburgh due to high labor costs
Economies of scale
Def: refers to the lower costs firms achieve
when they produce at higher levels
Sig. it is used to lower costs in order to
increase profits
Def: a trading post where merchandise can be
imported and exported without paying
import duties (e.g. Singapore)
Sig: the reluctance of ships to travel the entire
length of a long trading route, and selling to
the entrepôt instead. The entrepôt then sells
at a higher price to ships traveling the other
segment of the route.
Export Processing Zone (EPZ)
Def: Area of a country where normal trade
barriers such as tariffs and quotas are
eliminated and bureaucratic requirements are
Ex: Often found in developing countries in
hopes of attracting FDI (e.g. China)
AKA: Special Economic Zone, Free Trade
Zones & Export Promotion Zones
Footloose Industry
Def: An industry that is not tied to specific
place due to low transportation costs
Sig. It will move to a low labor cost region
if labor has a higher impact on profit than
Assembly line production of standardized
components for mass consumption.
• Sig. the mass production of identical goods
reduced costs & led to mass consumption
Def:The underlying framework of services
and amenities to facilitate productive
Ex. Roads, railways, telecommunications,
power, etc.
Labor-intensive Industry
Def: An industry for which labor costs make
up a high percentage of total expenses (as
opposed to capital intensive).
Ex: LDCs often hold a comparative advantage
in these industries
Major Manufacturing Regions
1. Western Europe (UK, Rhine-Ruhr Valley,
Mid-Rhine & Northern Italy)
2. Eastern Europe (Russia, Silesia & E. Ukraine)
3. North America (Great Lakes, New England,
Mid-Atlantic & Canada's St. LawrenceOntario)
4. East Asia (Japan, E. China, S. Korea &
Factories built by US & Japanese
companies in Mexico near the US border to
take advantage of cheap labor costs.
• Sig: near the border = lower transportation
Multiplier Effect
• Expansion of economic activity caused by
the growth or introduction of another
economic activity.
• Ex: a new basic industry will create jobs
directly or indirectly in the non basic sector
• The production of microchips draws
workers beyond microchip production,
(home construction, etc.)
North American Free Trade
Agreement (NAFTA)
Def: (1994) a free trade area among the US,
Canada, and Mexico (provides for the tarifffree
movement of products)
Sig: Cheaper to grow corn in US than in
Mexico so labor comes here as a result
A decision by a corporation to send jobs or
parts of production to a cheaper location.
Back offices are located in the periphery of
the city's headquarters or abroad
• Ex: US car companies outsource car parts
production and assembly
Post-1970 manufacturing practices with
more flexible production methods than
traditional Fordism (including just-in-time
delivery) .
• Sig: This has contributed to the new
international division of labor &
decentralization. (AKA neo-Fordism.)
DEF: Economies where the tertiary and
quaternary sectors have grown to dominate
the workforce, with smaller but highly
productive secondary sectors.
• EX: United States, Canada, and most of
Europe and Japan. (the highest levels of per
capita GDP is associated with the postindustrial
Research Triangle
Def: A region of North Carolina with a high
concentration of high tech businesses (e.g. IBM)
that were attracted there because of the large
number of local universities (e.g. Duke).
• EX: It is an example of a growth pole and the
agglomeration effect.
• Def: The recent return of manufacturing to the
core from traditionally lower labor-cost regions
due to higher labor and transportation costs.
• Sig: This has boosted the manufacturing sector in
the South and Mexico. Often the factories rely on
capital rather than labor.
Right-to-work laws
DEF: 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.
• SIG: The South has lower percentage of union
workers than elsewhere in the U.S.
Silicon Valley
Def: The region below San Francisco with a high
concentration of tech firms (e.g. Google).
• EX: This is an example of a growth pole and the
agglomeration effect.
Site Factors
Def: Location factors related to the costs of
factors of production inside the plant, such
as land, labor, and capital.
Sig: the most important factor is labor.
Situation factors
Def : This refers to whether the firm is closer to the market or to the inputs (resources). It's determined by transportation costs.
Ex : Steel companies located near its resources to minimize transportation costs (bulk-reducing). Others, like the Coca-Cola locates near the market to minimize costs (bulk-gaining).
Spatially Fixed & Variable Costs
Spatially variable costs are expenses that
change depending on where the firm locates
(labor costs).
Spatially fixed costs are the same no matter
where it locates (water costs)
Spread Effect
Def : Forces of de-concentration of wealth
Sig : High density, high labor costs and
environmental decay in the core and the
diffusion of technology to the periphery
also encourage the outward dispersion of
growth to the periphery
Ex : diseconomies of scale, deagglomeration,
creative destruction
Substitution Principle
Def: To find the location where the net
profit is the greatest, firms will substitute
one factor of production (e.g. labor) for
another (e.g. capital for automated
• Ex: Firms may pay higher transportations
costs in order to locate where labor is
Techno pole
Def: Refers to the agglomeration of high
tech manufacturing and information-based
quaternary firms
• Sig: Developed by private sectors or
partnership of pubic and private sectors
Textile Industry
Def: manufacturing of clothing
• Sig: associated with early stages of
industrialization (early industrial UK or
Taiwan, China, & India today). Industry is
female intensive.
Time-Space Compression
Def: the reduced time it takes for social interactions
due to improved transportation and communication
Ex: the railroad and the internet both reduced the
"relative distance' between places