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GEOG 2230 (2)
Chapter 2

Chapter 2

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Department
Geography
Course
GEOG 2230
Professor
Roberta Hawkins
Semester
Fall

Description
Chapter 2 The Spatial Division of Labour • Geographic multiplier - The ratio of total economic impacts to the initial economic impact of a new development within a region • Industrial districts - An agglomeration of related economic activities in a particular place; traditionally used in the context of manufacturing activities • clusters - The spatial concentration of related manufacturing and service activities; also increasingly used to refer to an industrial district. Another term for 'agglomeration'. • division of labour - The allocation of specific jobs to different people, and by extension to equipment and places; also referred to as 'specialization' • social division of labour - The distribution of tasks among firms in an economy. In practice, this term is often used when small firms play important roles • spatial division of labour - The allocation of specialized tasks among and within places and across space • economies of scale - a reduction in average costs of production achieved by increasing the scale of a particular activity Spatial Value Chains and Economies of Scale and Scope • geographic region - A territory or area with certain characteristics - physical, social, political, functional, etc - that distinguish it from contiguous territories • the internal value chain of the firm is integrated into a larger value chain that extends both upstream and downstream ◦ concept of the value chain thus emphasizes the linkages and coordination required to make any product or service Internal Economies • economies of scope - A reduction in average cots of production achieved by using existing resources to perform tasks over a range of product categories • Operating-level economies of scale ◦ occur when equipment, labour, materials, and other requirements can be engaged in the quantities necessary for efficient coordination of the division of labour and specialization • variable costs - Costs that vary with the scale of activity. • Fixed costs - costs that remain the same regardless of the scale of activity • sunk costs - Investments in physical capital such as factories and machinery, and to some extent skilled labour forces, that are (more or less) fixed in places and cannot be easily move • Firm-level economies ◦ minimum efficient (optimal) scale (MES/MOS) - The lowest level of output at which a plant or firm minimizes average costs that are low enough to make production viable ◦ firm-level economies (diseconomies) of scale - Reductions (increases) in average costs of production resulting from increasing levels of output ◦ logistics - managements of the flow of goods and services from points of origin to point of destination ◦ product differentiation - Modification of a product to create technologically or stylistically similar but different products to serve distinct market niches, usually resulting in economies of scope • efficiencies in differen activités (R and D, assembly, desgin) tend to be found in different places has been a major factor in the globalization of value chains External Economies • external economies (diseconomies) of scale - Reductions (increases) in average costs of production resulting from location in urban-industrial centres of economic acuity rather than small places. • Agglomeration economies ◦ urbanization economies - Reductions in average costs of production (or economic advantages) resulting from location in urban agglomerations that provide diverse labour pools and economic and social infrastructure ◦ Localization economies (diseconomies) of scale - Reductions (increases) in average costs of production (i.e. economic advantages) resulting from location in agglomerations of related economic activities ◦ public institutions also contribute to localization economies ◦ institutional thickness - The range of external economies provided to local firms by institutions (private and public) such as industrial associations or government planning departments ◦ agglomeration economies have promoted urbanization ◦ external economies facilitate urbanization; urbanization facilitates external economies, and the local multiplier effects of economic growth are highest in places where external economies are strong ◦ immobile economies - Externam economies that are available only w
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