Weber’s Least Cost Theory of Industrial Location – Flashcards
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Least Cost Theory
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predicted where industries would locate based on the locations that would be the lowest cost
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Weber's Model Assumes
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-heavier the good and/or further the distance cost more to ship -aim to minimize cost and increase profit -are in fixed locations -labor exists only in certain places -political-cultural landscape is the same across the space
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Weber's Model Assumes pt2
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location of industry is driven by four factors: -transportation -labor -agglomeration -deglomeration
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Weight Gaining Industries vs Weight Losing Industries
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-Early factories had to decide how close to locate near raw materials -costs were determine by factories location -factories using heavy or perishable raw materials had to be close to source to cut down on transportation costs
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Weight Losing
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manufacturing process that take raw materials and change them into a product that is lighter than the raw material that went into making it
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Weight Gaining
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takes raw materials and create heavier finished products
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Footloose Industries
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-not restricted to where the can locate because of transportation costs -some industries maintain the same costs for transportation and production regardless of where the choose to locate -often produce light weight products
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Labor Costs and Substitution Principle
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-cost of labor is a key factory where industries choose to locate -Industrial Capital: machinery, tools, employees -substitution principle applies when industries move to access lower labor costs, even if transportation costs increase
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Agglomeration
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industries are clump together in the same area, share associated costs of utilities and road usage
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High Tech Corridors and Technopoles
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-place where technology and computer industries agglomerate -technopole is a region of high-tech agglomeration, formed by similar high-tech industries seeking to share an area
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Backwash Effect
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negative consequences of agglomerates that occure when other areas suffer out-migration (brain drain) who are moving to a technopole
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Locational Interdependece
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-industries choose their locations based on where their competitors are located at -Industries want to maximize their dominance of the market
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Deglomeration
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-"unclumping" negative effects and high costs overcrowd -occurs when a agglomerated region becomes too crowded
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Outsourcing
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-corporation to turn over much of its responsibility for production to independent suppliers -low-cost labor in LDCs to cut production costs
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New International Division of Labor
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refers to transfer of certain steps to LDCs while others remain in MDS
