Chapter

Size and Location

Mario Polèse

in The Wealth and Poverty of Regions

Published by University of Chicago Press

Published in print February 2010 | ISBN: 9780226673158
Published online February 2013 | e-ISBN: 9780226673172 | DOI: http://dx.doi.org/10.7208/chicago/9780226673172.003.0002
Size and Location

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Within nations, where wealth-generation potential and job creation depend on four factors: size, location, cost, and unique events. The purpose of this chapter is to explain the economic foundations of the three rules: size matters, location matters, and costs matters. Rule one: size matters because most of the industries are naturally drawn to big cities and places within easy reach. Within nations, the size rule produces economic centers—dense multi-city constellations of economic activity. The corollary of size matters is that proximity to size—to urban centers—also matters. Rule two: location matters because industries (selling tradable products) are drawn to places best suited for commerce and interaction with market. Places located on trade corridors or closest to the nation's major trading partners are favored. Rule three: costs matter because—failing adequate size or a propitious location—places will grow if they have a clear labor cost advantage or, alternatively, an exceptional resource endowment.

Keywords: size; location; cost; tradable products; urban centers; trading; multi-city

Chapter.  15738 words.  Illustrated.

Subjects: Economic Development and Growth

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