functional linkage

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The link between industries, including information, components, raw materials, finished goods, and transport links. Functional linkages are at the heart of agglomeration economies. A firm's linkages are classified by their direction of movement: backward or input linkages are received by the firm—producer services have large backward linkages (Besser (2003) Rural Sociol. 68, 4). Forward linkages are supplied by a firm to another undertaking: ‘consumers/firms like to locate close to their suppliers as this decreases their living/production costs’ (Ottaviano and Robert-Nicoud (2006) J. Econ. Geog. 6, 2). See Crozet (2004) J. Econ. Geog. 4 on the forward linkages that relate labour migrations to the geography of production.

Subjects: Earth Sciences and Geography.

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