Advantages arising from the localization together of a number of firms in the same type of industry. Desmet and Fafchamps (2005) J. Econ. Geog. 5 distinguish between localization economies—benefits which derive from being located close to other firms in the same industry—and urbanization economies—associated with closeness to overall economic activity. Boschma and Weterings (2005) J. Econ. Geog. 5, 5 list knowledge externalities and a skilled labour market. Viladecans-Marsal (2004) J. Econ. Geog. 4 refers to localization economies as associated with a city's specialization.
Subjects: Earth Sciences and Geography.