Location and strategy

Harald Bathelt and Johannes Glückler

Chapter 2 in Concise Introduction to Relational Economic Geography, 2026, pp 15-28 from Edward Elgar Publishing

Abstract: Location decisions of firms are important for local and regional development, as the geographical distribution and the sectoral composition of business firms in a region affect job creation and economic prosperity. Without sufficient labor supply, city-regions’ economies are difficult to sustain, whereas new industrial spaces generate opportunities for development and increased tax revenues. Given that it is crucial to understand firms’ location decisions from the perspective of regional planning, it is surprising that location research has stagnated in recent years. This chapter reviews traditional approaches to industrial location theory, discusses their shortcomings, and then adopts a relational perspective for a better understanding of the locational choices of economic actors. By connecting location theory with firm strategy, the chapter discusses how actors develop distinct strategies that drive locational choices, with a particular focus on the role of knowledge.

Keywords: Agglomeration economies; Cluster; Cost minimization; National competitive advantage; Porter's diamond (search for similar items in EconPapers)
Date: 2026
ISBN: 9781802204971
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