The view that economic activity in a city can be broken down into two components: activity which meets local, internal demand, and activity which meets non-local demand. The latter is basic and city forming because, it's argued, it is demand from beyond the city which causes the city to grow. See Hill and Brennan (2000) Econ. Dev. Q'ly 14, 1. Taylor (2007) TIBG32, 2 finds economic base theory limited and simplistic.
Subjects: Earth Sciences and Geography.