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A geographical theory of (De)industrialization

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  • Pontes, José Pedro
  • Pires, Armando J. Garcia

Abstract

In the model of agricultural land use and rent of Von Thunen (1826), manufacturing decentralization is viewed as the refining (or “distilling”) of an agricultural commodity near the cultivation site, which substitutes for its transport to an industrial mill located in the Town. As Friedrich List (1841) added, this substitution is economically feasible only if the savings in transport cost following from in site refining cover the increase in fixed costs associated with a second industrial plant. We update this approach aiming to rationalize some stylized trends of manufacture relocation nowadays, which are jointly labeled as “deindustrialization”.

Suggested Citation

  • Pontes, José Pedro & Pires, Armando J. Garcia, 2021. "A geographical theory of (De)industrialization," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 567-574.
    • Handle: RePEc:eee:streco:v:59:y:2021:i:c:p:567-574
    DOI: 10.1016/j.strueco.2021.10.010
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • B20 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - General
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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