In order to better understand economic geography, a review of the existing literature on the topic is necessary. The first consideration of geography in economic models was made in 1885 when Launhardt introduced a strategic model of spatial competition. This model highlights the arbitrage firms face with regards to location: they wish to locate as close to the core market as possible while keeping a distance from their competitors in order to be profitable. In 1929, Hotteling further developed this model by adding the hypothesis of a market in imperfect competition.
Agglomeration theories first emerged in 1920 in a study by Marshall as the first nature geography could no longer fully explain concentration, as it could in agrarian societies. According to Marshall, industry
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More recently, agglomeration theories have started incorporating second nature geography, as the “factor endowment” theory. This theory by Heckscher and Ohlin (1933) builds on Ricardo’s theory of “comparative advantage”: countries export what can be most efficiently produced and industries locate where the factor of production is relatively abundant. Furthermore, in 1956 Isard introduced “the general theory of location and space-economy”, also known as the general location theory, which was a precursor to Krugman’s study of 1991 “Increasing Returns and Economic Geography”.
A key question economic geographers have asked themselves is whether economic growth fosters agglomeration? Recent theoretical work has been supporting the general assumption of growth fostering agglomeration, Martin and Ottaviano (1999) characterized growth and geographic agglomeration as “mutually self-reinforcing processes”, “Fujita and Thisse (2002) exhibited that growth and agglomeration go “hand in hand” and Baldwin and Martin (2004) stressed that “spatial agglomeration is
Polese, Mario. "Regional Economics." The Canadian Encyclopedia. HISTORICA FOUNDATION, 02 July 2006. Web. 13 Mar. 2014.
In the book The Power of Place: Geography, Destiny, and Globalization’s Rough Landscape, the author, Harm de Blij, argues that where we are born and our geography can affect who we are and what we will become. He applies his knowledge of geography and other relatable information such as health, economy, languages, and several other areas of subject. De Blij categorizes the earth into three subdivisions: locals, globals, and mobals. He defines locals as “those who are poorest, least mobile, and most susceptible to the power of place” (pg-notes). Globals are those who “whether in government, industry, business, or other decision-making capacities, flatten
...conomically beneficial trade and technology development. In this regard the Epilogue uses sound logic to plausibly answer the wealth question. On the other hand, Mr. Diamond uses the same "national competition" thesis to purport that Asia's large, centralized governments were conspicuously growth-inhibitive. This argument would not seem to pass muster given what we have learned about the role of governments. Professor Wright's slides state that "Centralization may limit predation and even allow for growth" as "centralized predation = incentives to maximize the haul " This clearly refutes Mr. Diamond's argument that centralized, monopolistic Asian governments impaired societal advances. Thus, Guns, Germs, and Steel can scantly explain why China and the Middle East remain emerging markets while Western and Northern Europe enjoy significantly larger national wealth.
One theme that is evident throughout Blij’s “Power of Place” is the concept of culture regions mainly his analysis of formal, core, and periphery areas. To introduce the idea of culture regions he mentions how the many of the world’s underdeveloped and poor nations are part of the world’s periphery. In particular, referring to Blij’s map on page 14 many of the developed countries are among the world’s core nations: Japan, Australia, United States, Canada, and Western Europe. Blij explains through his diagram that the peripheries are located in Southeast Asia, Africa, South America, and the Middle East (14). Blij des...
This book illustrates just how essential it is to be well-educated when it comes to geography. Throughout the book, Harm de Blij brings to our attention how illiterate Americans are when it comes to geography. He brings us This is an example of absolute location not to be confused with relative location because here, de Blij uses coordinates to indicate where the capitals are located. “Now the possibility arises that further global warming, speeded up by human pollution of the atmosphere, will cause a further rise in sea levels”(134).
Though it is very convincing, I do not fully agree with this concept. I agree that being located in a good geographical location enables a civilization to gain the upper hand early on, but I disagree that without good geography, a civilization will not be able to reach prosperity. My argument parallels James A. Robinson and Daron Acemoğlu’s argument made in Why Nations Fail: The Origins of Power, Prosperity, and Poverty. They used the example of Nogales, a city that is divided into two, with the northern half in the United States that enjoys a flourishing and safe life, while the southern half in Mexico and struggles to maintain a good living standard. This city has the exact same geographical conditions, and yet, the welfare varies drastically. The authors explain since the northern part of the city is in the United States, it has the access to the economic institutions, technology, and the government of the United States. In contrast, the southern part of the city suffers due to the corruption, disorder, and poor government system that is of Mexico. The point Robinson and Acemoğlu try to make with the example of Nogales, which I am in concurrence with, is that since it was technological development that gave North America the step up in the modern era, it doesn’t fully explain why Latin America, who
In an increasingly global world geography matters now more than ever. With so many groundbreaking technological advances within the last 50 years the world is rapidly evolving into a more interconnected and codependent society. These strides of advancement not only allow for international business interactions, but it allows instant communication to make business more cohesive. As a more interconnected society it is important for every person to understand the locations and cultural motivations of the people they interact with. These subject matters are suggested and discussed in “Why Geography Matters…More Than Ever!”
Geographical division of labor is the concept that labor can be divided according to geographical concepts. For example: land locked countries generally don't export goods overseas as well as countries with a large coastline; countries without large bodies of water can't export fish; countries that have small populations and large oil deposits are likely to make oil their main export; countries with large coastlines, low value on human rights, an overcrowded population, and a poor population are likely to engage in low cost mass manufacturing.
All of them are in some way related to cities and, therefore, to the hypothesis in the title of this paper. Successful, widespread industrialization depends on the extent to which the above conditions exist in a given economy. Or, in other words, successful industrialization is not possible without a certain amount of capital, entrepreneurs who invest it in industrial manufacturing, technology to enable industrial production, skilled and less skilled labor to operate the machines, and sufficient transportation systems to make the purchase of raw materials and the sale of manufactured products profitable. As these conditions are less likely to develop in an agrarian economy, a certain level of urbanization was necessary to obtain them.” After reading this passage, it was clearer to see that a market was not developed in the District of Columbia, because there was no specific need for one.
India and China however, were landlocked and were by far the greatest industrial powers in the world till the Industrial revolution. Technology, not geography, helped temperate agriculture and industry to zoom ahead. One way a country overcomes geographical isolation is to improve its transportation infrastructure. Better roads, ports, paths, and other modes of transport provide access to world markets. But a country can only derive full benefits from these investments against a backdrop of good trade and macroeconomic policies. Consequently this leads to the belief that people again control the thought of their own geography.
Sternberg, R. and Kiese, M. and Stockinger, D. (2008) ‘Cluster policies in the US and Germany: varieties of capitalism perspective on two high-tech states’ Environment and Planning C: Government and Policy 2010, 28, pp.1063-1082
De, Blij Harm J., and Peter O. Muller. Geography: Realms, Regions, and Concepts. New York: J. Wiley, 1997. 340. Print.
Over the past decade there has been a booming interest in industrial agglomeration and specialisation by economists and policy-makers. The cluster theory has become a standard concept the world over, implanted in the minds of policy-makers and utilised through various adaptations from Porter’s (1998) original model as a tool for national, regional and local competitiveness, their innovation and growth. A cluster is the geographical concentration of various associated institutions in related industries that not only compete, but also co-operate in order to achieve efficiency and innovation (Porter, 1998). Clustering has become so prominent and popular due to its central focus on the elements that provide firms, industries and locations a form of competitiveness. This resonates closely with politicians and policy-makers due to the increasing importance of competitiveness in succeeding in a global economy.
Since the beginning of humankind, the study of geography has captured the imagination of the people. In ancient times, geography books extolled tales of distant lands and dreamed of treasures. The ancient Greeks created the word "geography" from the roots "ge" for earth and "grapho" for "to write." These people experienced many adventures and needed a way to explain and communicate the differences between various lands. Today, researchers in the field of geography still focus on people and cultures (cultural geography), and the planet earth (physical geography).
Mainly advantages of location decide the structural growth of the industries in the economy. More number of states in the country faces the problem of advantage location. Similarly, the agriculture sector also suffers from natural calamities and other disturbances. The dependence on agriculture varies considerably across the states.