Deindustrialization in the light of classical location theory
Armando J. G. Pires and
José Pontes ()
No 2018/25, Working Papers REM from ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa
In this paper, we used a framework due VON THUNEN (1966) and Friedrich LIST (1841) where manufacturing development is regarded as a process of “refining” primary raw materials in order to yield “lighter”, easier to carry products. If the artificial regulations which formerly kept industrial plants confined to core urban areas are abolished, then factories shift to rural areas in order to be close to the sources of farming raw materials, provided that the industrial transformation is sufficiently weight losing. However, the new productive sites for manufacturing will remain at a bounded distance from the Town, since they must bear the transport costs of shipping the output to the central meeting point where it must be transacted. Areas which are beyond this distance threshold are occupied by a traditional cottage economy, where goods are not carried to the Town but are rather produced for the household self-consumption. This framework also explains the observed fact that, within manufacturing, resource based branches are more centrally located in relation to core urban areas than other sectors.
Keywords: Deindustrialization; Land Rent; Location Theory; Von Thunen; Economic Development (search for similar items in EconPapers)
JEL-codes: O14 R11 R30 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:ise:remwps:wp0252018
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