Table of Contents
Introduction to economic geography ..................................................................................................... 3
Basics................................................................................................................................................... 3
Examples ............................................................................................................................................. 3
Economic geography and other disciplines ........................................................................................ 3
Economic geography and transport.................................................................................................... 4
History of economic geography – idiographic .................................................................................... 4
Geographical Information Systems (GIS) ............................................................................................ 4
Location theory ....................................................................................................................................... 6
Introduction ........................................................................................................................................ 6
(Neo-) classical location theory........................................................................................................... 6
(Neo-) classical location theory – von Thünen – Bid rents ............................................................. 6
(Neo-) classical location theory – Weber – Material index ............................................................. 8
(Neo-) classical location theory – Christaller – Central place theory .............................................. 9
Contemporary location theory ......................................................................................................... 11
Behavioural approaches – sub-optimalisation ............................................................................. 11
Structuralist approaches – complexity ......................................................................................... 12
Checklist of localisation factors ............................................................................................................ 15
Classical localisation factors.............................................................................................................. 15
Physical-geographical context ...................................................................................................... 15
Production factors – land, labour, capital..................................................................................... 15
Demand, transport, and agglomeration effects ........................................................................... 16
Behavioural/structuralist factors ...................................................................................................... 18
Technological context ................................................................................................................... 18
Organisational context .................................................................................................................. 18
Social and cultural context ............................................................................................................ 19
Political context............................................................................................................................. 19
How to assess localisation within a certain economic activity ..................................................... 20
The clothing and automobile industry .................................................................................................. 21
Evolution of manufacturing .............................................................................................................. 21
Localisation ....................................................................................................................................... 21
Garment (clothing) manufacturing ............................................................................................... 21
Automobile industry ..................................................................................................................... 22
Apply the checklist of localisation factors – explanation of the spatial patterns ............................. 24
Garment (clothing) manufacturing ............................................................................................... 24
1
, Automobile industry ..................................................................................................................... 26
Heavy transport infrastructure ............................................................................................................. 29
Location of heavy transport infrastructure....................................................................................... 29
Localisation factors of heavy transport infrastructure ..................................................................... 30
Retail ..................................................................................................................................................... 35
Location of retail ............................................................................................................................... 35
Localisation factors of retail .............................................................................................................. 39
Geography of logistics........................................................................................................................... 42
Location of logistics........................................................................................................................... 42
Evolving spatial patterns of logistics ............................................................................................. 42
Localisation factors of logistics ......................................................................................................... 44
World cities ........................................................................................................................................... 47
World cities – Introduction ............................................................................................................... 47
World cities – Approaches ................................................................................................................ 47
Multinational corporate economy ................................................................................................ 48
New international division of labour ............................................................................................ 48
Advanced producer services ......................................................................................................... 48
International financial centres ...................................................................................................... 52
Maritime world cities ........................................................................................................................ 52
Introduction .................................................................................................................................. 52
Rankings ........................................................................................................................................ 53
Regional policy ...................................................................................................................................... 55
Introduction ...................................................................................................................................... 55
Regional economic differences ..................................................................................................... 55
The need for regional policy ......................................................................................................... 56
European policy ................................................................................................................................ 58
Competition policy – state subsidies ............................................................................................ 58
Cohesion policy – European subsidies .......................................................................................... 60
Cohesion policy – smart specialisation strategy (S3) .................................................................... 62
Cohesion policy – Results.............................................................................................................. 63
City mgmt./marketing ........................................................................................................................... 64
Introduction ...................................................................................................................................... 64
From traditional urban policy to city mgmt. ..................................................................................... 64
Smart cities.................................................................................................................................... 65
City marketing ................................................................................................................................... 66
4 Ps ................................................................................................................................................ 66
2
,Transport and Location
Introduction to economic geography
Basics
What is it?
o Multidisciplinary field – intersection between human geography and economics
Geography = study of places, the interactions between places, and the
relationship w/ people and their environment.
Economics studies the production, distribution, and consumption of scarce
goods and services
o Link between space and economic scarcity
Terminology
o Economic geography = geographers studying economic processes
o Regional economics = economists adding spatial variables in their models
Micro- and macroeconomic processes
o Micro: business location choice, accessibility of economic goods …
o Macro: international trade, employment patterns …
Different spatial levels
o The individual (company)
o Urban economy/geography producers and consumers
o Regional economy within the context of the world economy
Important for both the public and private sector
A significant number of economic problems have a spatial component
Examples
Famine: not a lack of food, but an uneven distribution.
Rare earths: not that rare, but an uneven distribution, e.g. 63% of dysprosium deposits are
located in China.
Employment: oversupply of jobs in one location, while there is an undersupply in other
locations.
Food swamps: local oversupply of unhealthy food contributes to obesity.
Economic geography and other disciplines
Macro- and microeconomics
Product management and the production factors
o Land has a spatial component, but so do labour and capital!
Finance
o Real estate as an important investment vehicle, cf. great recession
o Input for hedge funds, e.g. trade war US - China
Marketing
o Cities use place marketing to attract investors, tourists …
o Marketing also uses location, e.g. flagship stores – Louis Vuitton store @ Champs
Elysées
3
, Economic geography and transport
TPR: Transport and Regional Economics
Transport and economic geography are sister disciplines
o Transport is derived demand
o Economic geography shifts the focus to the origins and destinations
o Historically, transport was the sole/dominant localisation factor
o Transport innovations allowed other localisation factors, e.g. labour cost, to be
brought to the foreground
o Still, transport and economic geography are intrinsically linked, e.g. resiliency crisis
Issues new bridge over Schelde
o Transport: will this bridge be a reliable link between left and right bank?
o Economic geography: is this a logical route for employees of the left bank to get jobs
on the right bank?
Influence of transport on economic geography
o One new highway passing through a central city reduces its population by +/- 18%.
Estimates imply that aggregate central city population would have grown by +/- 8%
had the interstate highway system not been built.
o Car ownership substantially reduces density. A one standard deviation increase in
car ownership rates cause a reduction in population density of +/- 35%.
o Early railway developments in Italy had a sizeable effect on industrial growth in the
northern regions, both in terms of direct and spillover effects.
Ignoring the location of activities will lead to expensive mistakes (examples)
o Spain’s Ciudad Real airport outside the city of Madrid was constructed and later
abandoned bc it was not used.
o Station Lanaken, only accessible via a detour through the Netherlands => not used
History of economic geography – idiographic
Ideographic geography
o Solely descriptive
o Heavily reliant on cartography
o Only one localisation factor: physical geographical context
Describes where things are
Case studies of regions and/or product categories
Geographical Information Systems (GIS)
Adding data to maps
Use of big data to do this, e.g. map of happiest and saddest places in NY, based on keywords,
phrases, and emoticons in geotagged tweets; planefinder and shipfinder.
4
Introduction to economic geography ..................................................................................................... 3
Basics................................................................................................................................................... 3
Examples ............................................................................................................................................. 3
Economic geography and other disciplines ........................................................................................ 3
Economic geography and transport.................................................................................................... 4
History of economic geography – idiographic .................................................................................... 4
Geographical Information Systems (GIS) ............................................................................................ 4
Location theory ....................................................................................................................................... 6
Introduction ........................................................................................................................................ 6
(Neo-) classical location theory........................................................................................................... 6
(Neo-) classical location theory – von Thünen – Bid rents ............................................................. 6
(Neo-) classical location theory – Weber – Material index ............................................................. 8
(Neo-) classical location theory – Christaller – Central place theory .............................................. 9
Contemporary location theory ......................................................................................................... 11
Behavioural approaches – sub-optimalisation ............................................................................. 11
Structuralist approaches – complexity ......................................................................................... 12
Checklist of localisation factors ............................................................................................................ 15
Classical localisation factors.............................................................................................................. 15
Physical-geographical context ...................................................................................................... 15
Production factors – land, labour, capital..................................................................................... 15
Demand, transport, and agglomeration effects ........................................................................... 16
Behavioural/structuralist factors ...................................................................................................... 18
Technological context ................................................................................................................... 18
Organisational context .................................................................................................................. 18
Social and cultural context ............................................................................................................ 19
Political context............................................................................................................................. 19
How to assess localisation within a certain economic activity ..................................................... 20
The clothing and automobile industry .................................................................................................. 21
Evolution of manufacturing .............................................................................................................. 21
Localisation ....................................................................................................................................... 21
Garment (clothing) manufacturing ............................................................................................... 21
Automobile industry ..................................................................................................................... 22
Apply the checklist of localisation factors – explanation of the spatial patterns ............................. 24
Garment (clothing) manufacturing ............................................................................................... 24
1
, Automobile industry ..................................................................................................................... 26
Heavy transport infrastructure ............................................................................................................. 29
Location of heavy transport infrastructure....................................................................................... 29
Localisation factors of heavy transport infrastructure ..................................................................... 30
Retail ..................................................................................................................................................... 35
Location of retail ............................................................................................................................... 35
Localisation factors of retail .............................................................................................................. 39
Geography of logistics........................................................................................................................... 42
Location of logistics........................................................................................................................... 42
Evolving spatial patterns of logistics ............................................................................................. 42
Localisation factors of logistics ......................................................................................................... 44
World cities ........................................................................................................................................... 47
World cities – Introduction ............................................................................................................... 47
World cities – Approaches ................................................................................................................ 47
Multinational corporate economy ................................................................................................ 48
New international division of labour ............................................................................................ 48
Advanced producer services ......................................................................................................... 48
International financial centres ...................................................................................................... 52
Maritime world cities ........................................................................................................................ 52
Introduction .................................................................................................................................. 52
Rankings ........................................................................................................................................ 53
Regional policy ...................................................................................................................................... 55
Introduction ...................................................................................................................................... 55
Regional economic differences ..................................................................................................... 55
The need for regional policy ......................................................................................................... 56
European policy ................................................................................................................................ 58
Competition policy – state subsidies ............................................................................................ 58
Cohesion policy – European subsidies .......................................................................................... 60
Cohesion policy – smart specialisation strategy (S3) .................................................................... 62
Cohesion policy – Results.............................................................................................................. 63
City mgmt./marketing ........................................................................................................................... 64
Introduction ...................................................................................................................................... 64
From traditional urban policy to city mgmt. ..................................................................................... 64
Smart cities.................................................................................................................................... 65
City marketing ................................................................................................................................... 66
4 Ps ................................................................................................................................................ 66
2
,Transport and Location
Introduction to economic geography
Basics
What is it?
o Multidisciplinary field – intersection between human geography and economics
Geography = study of places, the interactions between places, and the
relationship w/ people and their environment.
Economics studies the production, distribution, and consumption of scarce
goods and services
o Link between space and economic scarcity
Terminology
o Economic geography = geographers studying economic processes
o Regional economics = economists adding spatial variables in their models
Micro- and macroeconomic processes
o Micro: business location choice, accessibility of economic goods …
o Macro: international trade, employment patterns …
Different spatial levels
o The individual (company)
o Urban economy/geography producers and consumers
o Regional economy within the context of the world economy
Important for both the public and private sector
A significant number of economic problems have a spatial component
Examples
Famine: not a lack of food, but an uneven distribution.
Rare earths: not that rare, but an uneven distribution, e.g. 63% of dysprosium deposits are
located in China.
Employment: oversupply of jobs in one location, while there is an undersupply in other
locations.
Food swamps: local oversupply of unhealthy food contributes to obesity.
Economic geography and other disciplines
Macro- and microeconomics
Product management and the production factors
o Land has a spatial component, but so do labour and capital!
Finance
o Real estate as an important investment vehicle, cf. great recession
o Input for hedge funds, e.g. trade war US - China
Marketing
o Cities use place marketing to attract investors, tourists …
o Marketing also uses location, e.g. flagship stores – Louis Vuitton store @ Champs
Elysées
3
, Economic geography and transport
TPR: Transport and Regional Economics
Transport and economic geography are sister disciplines
o Transport is derived demand
o Economic geography shifts the focus to the origins and destinations
o Historically, transport was the sole/dominant localisation factor
o Transport innovations allowed other localisation factors, e.g. labour cost, to be
brought to the foreground
o Still, transport and economic geography are intrinsically linked, e.g. resiliency crisis
Issues new bridge over Schelde
o Transport: will this bridge be a reliable link between left and right bank?
o Economic geography: is this a logical route for employees of the left bank to get jobs
on the right bank?
Influence of transport on economic geography
o One new highway passing through a central city reduces its population by +/- 18%.
Estimates imply that aggregate central city population would have grown by +/- 8%
had the interstate highway system not been built.
o Car ownership substantially reduces density. A one standard deviation increase in
car ownership rates cause a reduction in population density of +/- 35%.
o Early railway developments in Italy had a sizeable effect on industrial growth in the
northern regions, both in terms of direct and spillover effects.
Ignoring the location of activities will lead to expensive mistakes (examples)
o Spain’s Ciudad Real airport outside the city of Madrid was constructed and later
abandoned bc it was not used.
o Station Lanaken, only accessible via a detour through the Netherlands => not used
History of economic geography – idiographic
Ideographic geography
o Solely descriptive
o Heavily reliant on cartography
o Only one localisation factor: physical geographical context
Describes where things are
Case studies of regions and/or product categories
Geographical Information Systems (GIS)
Adding data to maps
Use of big data to do this, e.g. map of happiest and saddest places in NY, based on keywords,
phrases, and emoticons in geotagged tweets; planefinder and shipfinder.
4
