Urban and Regional Prosperity in a Globalised New Economy

Urban and Regional Prosperity in a Globalised New Economy

Edited by Roger Sugden, Rita Hartung Cheng and G. Richard Meadows

There is currently a popular view that the world is undergoing profound changes in the fundamental relationships upon which it is organised. In particular, there is widespread talk of a ‘globalised’ economy, facilitated by and associated with ‘new’ technologies and practices. There is a further consensus that within this ‘globalised’, ‘new’ economy, regionalisation in some form is important. The aim of this volume is to address these topical issues, presenting perspectives from which they can be analysed and exploring specific aspects in greater detail. The contributors provide a framework for understanding current trends, and suggest approaches that highlight appropriate ways forward in the context of both opportunities and dangers. In doing so, they discuss specific cases and explore detailed policy possibilities, including the prospect of stimulating change through multinational engagement and debate.

Chapter 7: Economic gains from regional concentration of business operations

James Peoples

Subjects: urban and regional studies, regional studies, urban studies


James Peoples* 1. INTRODUCTION Theory suggests that regional concentration of business operations can enhance production efficiency (Marshall, 1879). However, there has been a trend of growing geographical dispersion of business operations in the US. For example, major companies in brewing and automobile manufacturing have become much less centrally located. The rationale for such business trends, in part, is the ability to quickly service local markets, to reduce the companyÕs reliance on any one local labour market, to avoid high transportation costs, and to minimise potential harm from declining local economic conditions.1 The dispersion of business operations, though, is not limited to large multiplant corporations. Smaller fringe firms might avoid local competition over resources and instead choose to set up operations in locations with low industrial concentration. Given the rationale for dispersing operations regionally, this study examines whether it is still advantageous for US companies to operate mainly in a few localities. It is possible that regional concentration of operations presents business with a competitive advantage by enhancing productivity. Enhanced productivity occurs in part, because regionally concentrated business activity facilitates the development of expertise centres. These centres are most likely to be located in metropolitan areas given that large pools of skilled workers reside in these locations. This study tests the hypothesis on regional industrial concentration and industry performance in the US by estimating a productivity equation that includes regional concentration of industry operations as an explanatory variable. In contrast, past research on agglomeration and US productivity considers local population...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information