Economic and Industrial Geography Terms

Foreign direct investment The total of overseas business investments made by private companies

Purchasing Power Parity A monetary measurement taking into account what money actually buys in a country

Technology Gap The contrast between the technology available in the core and present in the periphery

Technology Transfer The diffusion or acquisition by one culture or region of the technology possessed by another

Agglomeration When a substantial number of enterprises cluster in the same area, as in a large industrial city, they can provide assistance to each other through shared talents, services and facilities

Agglomeration Economies agglomeration economies refers to savings or benefits derived from the clustering of activities

Assembly Line/Fordism Traditionally in large factories each worker was assigned one specific task to perform repeatedly

Bid Rent Theory a geographical theory that refers to how the price and demand on land changes as the distance towards the CBD (Central Business District) increases.

Break of Bulk Point The location (usually a port) where a shipment is divided into parts. This usually (such as at the port) happens where a transfer of the shipment between transport modes occurs, such as between water and land at a port.

Comparative Advantage Principle whereby places and regions specialize in activities for which they have the greatest advantage in productivity relative to other regions----or for which they have the least disadvantage

Deglomeration The process of industrial deconcentration in response to technological advances and/or increasing costs due to congestion and competition

Deindustrialization a relative decline in industrial employment in core regions

Economies of Scale Savings that accrue from large-scale production when the unit cost of manufacturing decreases as the level of operation enlarges

Ecotourism Aims to inform about the natural environment

Export Processing Zone Small areas within which especialy foavorble investment and trading conditions are created by governments in order to attract export oriented industries

Footloose Industry an industry whose production costs are unaffected by location many modern industries have components which are much easier to transport, giving them much more choice of location

Industrial Regions Western and Central Europe Eastern North America Russia and Ukraine Eastern Asia

Industrial Revolution A series of improvements in industrial technology that transformed the process of manufacturing goods

Infrastructure The foundations of society: Urban centers Transport networks Communications Energy systems Educational facilities Farms, factories, mines

International Division of Labor The specialization by countries in particular products for export

Labor-Intensive An industry for which labor costs comprise a high percentage of total expenses

Least-Cost Location Model developed by Weber according to which the location of manufacturing establishments is determined by the minimalization of cost

maquiladora Factories built by US companies in Mexico near the US border to take advantage of much lower labor costs in Mexico Imported components or raw materials are assembled and then finished products are exported An example of an export processing zone

Market orientation Production of a good will be located near the market if the cost of transporting goods to consumers is a critical locational factor Bulk gaining Single market Perishable Example of a situation factor

Multiplier effect Expansion of economic activity caused by the growth or introduction of another activity

NAFTA North American Free Trade Agreement 1994 Created a free trade area between US, Mexico and Canada Provides for tariff free movement of goods, products, financial services, telecommunications, investment and patent protection

outsourcing The process of transfering a function or service to a third party Generally takes advantage of low wages in semi-peripheral or periphery countries

postindustrial An emerging economy in technologically advanced countries as traditional industry is overshadowed by a high-tech productive complex dominated by services and info related and managerial activities

Resource orientation If the weight and bulk of any one input is particularly great, the firm may locate near the source of that input to minimize transportation costs Bulk reducing industries Copper Steel

Special economic zones (China) SEZ’s A specific area within a country in which tax incentives and less stringent environmental regulations are implemented to attract foreign businesses and investment a geographical region that has economic laws that are more liberal than a country's typical economic laws

Substitution principle From Weber, when one cost decreases a firm can endure higher costs in another area

Threshold/range Range is the maximum distance people are willing to travel to use a service Threshold is the minimum number of people needed to support the service

Transnational corporation A company that conducts research, operates factories and sells products in many countries, not just where its headquarters or shareholders are located

Weight gaining an industry that makes something that gains volume or weight during production Bulk gaining industries

Weight losing An economic activity in which the final product weighs less than its inputs Bulk reducing Copper Steel

World cities Most closely integrated into the global economic system because they are at the center of the flow of information and capital London New York Tokyo