GEOG 597i
Critical Geospatial Thinking and Applications

Some Basic Concepts of Economic Geography

A spatial process is a strategy for finding the most advantageous location for a manufacturing plant, or the optimal location of retail outlets. Spatial structure involves the internal organization of distribution. 

Spatial interaction is dependent upon three conditions; complementarity, transferability, and intervening opportunity. Complementarity is necessary for any kind of economic spatial interaction to take place. For movement to take place, at least one place must demand something another place can supply, and the demand and supply must be complementary. In other words, not only must one place want to buy what the other can supply, but they must also agree on a price. 

Transferability is also necessary for interaction to occur. As distance increases, transportation costs rise accordingly. At some point, the costs of transporting a material to a market may exceed the buyer’s ability or willingness to pay. In such circumstance, no transaction is possible. Camel cigarettes once bragged that people would “…walk a mile for a Camel.” I doubt that. The effort involved in walking a mile specifically for a cigarette would probably far outweigh a potential customer’s craving for a cigarette (or in some cases, perhaps not).

Intervening opportunities constrain the level of interaction between two places. Consider the example of walking a mile for a Camel cigarette. Perhaps a nicotine addict would walk a mile for a cigarette if he or she had no other choice. On the other hand, if cigarettes were available at a location only a block away at approximately the same price as in the store located a mile away, it would be most unlikely that the consumer would decide to walk the extra distance when he or she need not do so. 

Check Your Understanding
 

Short Answer

Upon what three conditions is spatial interaction dependent?



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ANSWER:
Complementarity, transferability, and intervening opportunities.
 

 

Check Your Understanding
 

Short Answer

What are the three factors of production?



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ANSWER:
Land, labor, and capital
 

The Location of Industries

Industrial location is the result of the same basic factors of production that influence the location of primary activities such as farming, mining, and logging; land, labor, capital, and entrepreneurship.   These factors do not however impact upon industrial location in the same way that they do relative to the location of primary activities. Additionally, it is important to remember that manufacturing is unique in that the location of one firm generally influences the location of other firms.  This is less true in the primary sector of the economy.  Furthermore, industrial locations are affected by numerous institutional characteristics that manifest themselves in the organizational tendencies of societies and cultural differences that result in variations in human behavior.