Dynamic Locational Phases of Economic Activity in the Globalized World

This book clarifies mechanisms of economic globalization to change industries' locations and shows the newly generated location patterns. First, the book deals with the retailing industry. Introducing a concept of contact price into market analysis, it is shown that the retailers' market areas and prices change in different ways by reduction of transportation costs. The mechanism of this change is clarified by checking the contact prices at the apexes of retailers' market areas. Next, the book selects the manufacturing industry and deals with industrial agglomeration and fragmentation of factories' production processes. This second part explains the manner in which the production volume of each factory within an agglomeration decreases as the number of factories located in the agglomeration increases. Considering the fact that many manufacturing firms tend to depart production blocs fragmented at agglomerations to other locales to seek a reduction in production costs, this part proposes a method of searching in which firms seek out a new location for a fragmented production bloc with lower search costs: By referring to a chaotic phenomenon, manufacturers can establish a prospective area and then find the optimal location within that area. Third, a city system is selected. The third part of the book elucidates the theoretical formation of a city system and analyzes changes in the structure of a city system due to reduction of transportation costs. Processes of the change are explained by using the city system theory constructed by the market areas established in free-entry competition. Subsequently, the economic relationships between the cities within a city system are examined from the point of view of land rent in cities. This analysis shows influences of economic changes in the largest city on medium and small cities. Finally, the relationship between a city system and regional performance is examined using Japanese data. This examination indicates a clear relationship between them.