By Professor E. A. G. Robinson (eds.)

ISBN-10: 0333406265

ISBN-13: 9780333406267

ISBN-10: 134915315X

ISBN-13: 9781349153152

ISBN-10: 1349153176

ISBN-13: 9781349153176

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Extra resources for Backward Areas in Advanced Countries: Proceedings of a Conference held by the International Economic Association

Example text

Cs· t'-< I § ~- <::3- c:. 14 The Theoretical Background economic activities in terms of a set of simultaneous equations relating only to current technical considerations. One of the principal factors in determining the location of capacity in any activity is the location of the market for that activity and in particular the location of that part of the market which is currently least well served by existing capacity. The present location of the market is in part the result of past activities of all kinds; it is being modified progressively all the time by the developments of new activities.

By creating a level of demand in the region which justifies the establishment of industrial units to meet it, thus reducing the import ratio and the 'leak'. This can be done (as in the case of a developing country) by import-saving investment if it is possible to find means of making import-saving products at prices that will compete with imports. (4) They may alternatively be met by creating in the region an infrastructure and facilities which, taken in conjunction with labour resources and real wages for given efficiency, now justify the establishment in the region of industrial units to meet the demands of the national market.

If on balance it is more economic to move the worker to a new place of work than to bring the work to potentially available workers, justification is needed for choosing the less-economic location. There is evidence, however, that many location-decisions are influenced by rather minor considerations of personal preference or convenience, rather than by major differences of cost. There are many industries in which transport costs of materials and of the finished product are small in total and the additional cost of a nonoptimal location is small.

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Backward Areas in Advanced Countries: Proceedings of a Conference held by the International Economic Association by Professor E. A. G. Robinson (eds.)


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