How Transport Costs Shape the Spatial Pattern of Economic Activity

By its very nature, transport is linked to trade. Trade being one of the oldest human activities, the transport of commodities is, therefore, a fundamental ingredient of any society. People get involved in trade because they want to consume goods that are not produced within reach. The Silk Road provides evidence that shipping high-valued goods over long distances has been undertaken because of this very precise reason. But why is it that not all goods are produced everywhere? The reason is that regions are specialized in the production of certain products. The first explanation for specialization that comes to mind is that nature supplies specific environments needed to produce particular goods. According to Diamond (1997), spatial differences in edible plants, with abundant nutrients, and wild animals, capable of being domesticated to help man in his agricultural and transport activities, explain why only a few regions have become independent centers of food production. Though relevant for explaining the emergence of civilization in a few areas, we must go further to understand why, in the wake of the Industrial Revolution, interregional and international trade has grown so rapidly.