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Geog Econ Final
| Question | Answer |
|---|---|
| Internet | e-commerce-business to consumer (B2C) or business-to-business (B2B). Cuts out the retailer/store. |
| Explicit knowledge | Conveyed through a set of instructions |
| Tacit Knowledge | You understand it without it being stated. EX: youre in the wine industry and you need to know what tastes and smells make certain wine or good wine. Develop skills over time and an understanding of how to do something. |
| Advanced manufacturing and services | Things like aerospace, pharmaceuticals, IT. 1/3rd of manufacturing can be classified as this. Services could be marketing and advertising rather than physical goods. |
| Information | data |
| Knowledge | combining information so that it is useful |
| Subcontractors | Another company hired to do something for another company which does not tie up capital for main company (less investment in certain things), flexibility with market changes, going around environmental and labor laws (play ignorance) |
| multinational corporations | A company that owns or controls production or service facilities in multiple countries |
| Domestic content | What percent of products in creating a product is sourced domestically. EX: Honda is headquartered in Japan, but the Honda Civic is constructed in the US and 80% is domestic, so technically it is a US car. |
| Stages of globalization | 1. Self-sufficiency ("autarky") 2. Internalization (basic trade) 3. Integration 4. International division of labor |
| Intensity model Research and Development intensive | Highly concentrated, advanced regions. Located in advanced regions in more developed countries. Demands high levels of education and pay high wages. Headquarters would be located here as well EX: IT |
| Intensity model Knowledge intensive | Somewhat concentrated, EX: auto-industry |
| Intensity model Capital intensive | Geographically widespread, capital is mobile. EX: steel, chemicals, shipbuilding. Costs a lot to create production facilities, not much specialization needed. |
| Intensity model Labor intensive | Not skilled, also widespread, but less developed countries or middle income countries see this more. EX: textile and clothing |
| Firm specific | Expertise: good at what they do, have an advantage over domestic producers (less skilled). Brand internationally recognized and trusted. |
| Location specific | Natural resources, access to foreign consumer markets. Culture can influence FDI, US has special relationship with UK bc they both speak English, we have cultural closeness so it is easier for companies to set up. |
| Ways to globalize for multi-national corporations | trade, exporting, licensing, Foreign direct investment |
| licensing | Rather than exporting your good you have a partner company in another country, they have the license to produce for that foreign market while the main comapny gets royalty. |
| foreign direct investment (FDI) | Direct investment made. by a firm in another country (different from "portfolio" investments like buying stocks) it is a "trade substitute", has physical facilities, acquisitions (buying up another comapny/competitor) |
| Non tariff barriers to trade | Quotas - quantitative limit on imports. Customs procedures can take a long time, can sit for a long time, paperwork needs to be filled and delays happen. Technical regulations and standards. Disregard for intellectual property rights. Export subsidies. |
| Increase in trade | function of distance reduced through improved transportation, increasing emphasis on free trade, globalization of production systems (trans-national corporations, supply chains) openness of economy |
| Direct service companies | All located in the same area of a city "auto row" for cars, antique districts. Bc of comparison shopping, people often don't know what they want exactly, people talk to many dealers like car dealers and if you have a better deal or location, you benefit. |
| Strategic location | Far away from competitors, homogenous good/services ("commodities") - fairly spread out equally bc EX: groceries have carved a geographic niche. |
| Just-in-time delivery | reduces inventories and warehousing favors concentration. Usually within a one day delivery radius |
| Bakery | small scale, market oriented |
| Flour mill | resource-oriented, weight losing, so large scale probably serving hundreds of bakeries and not close together. |
| Auto alley | from Ontario to Alabama. I-75, I-65 has spread the auto industry down from Detroit petering out somewhere in Central Alabama. |
| Auto alley Northern and Southern part | Northern part is the big three and the Southern part is non US brands |
| The Detroit Three | Ford, General Motors, Chrysler. Detroit has a history of innovation is why auto industry was so big here. Access to steel-nearby steel production at the time. |
| What did Henry Ford perfect | the assembly line process. |
| Complex forming | This is located where the spatial complex is going to be. All of the smaller intermediate goods will build close to. The Big final industry. |
| Complex serving | Smaller intermediate goods surrounding big company |
| Economic linkages | Better to locate companies near each other, trading of intermediate goods. Reduce transportation cost-timely deliveries, Spatial industrial complex-location close together- same city/state. |
| Subsidies | Land, tax breaks, public infrastructure investments (upgrading road infrastructure for a company to be able to operate), workforce training through government. |
| Spatially differentiated taxes | EX: local municipality property tax, state taxes. Lower taxes should increase profits, but higher taxes give better agglomeration (roads, infrastructure, education). Not necessarily always better to have lowest taxes. |
| Spatially (un)differentiated taxes | Can have taxes the same across a large area. EX: a fuel tax exactly the same no matter where you are in a country. But if its a high fuel cost, the TC will play a large role, then if not high then TC wont and other will play a bigger role. |
| Why do firms locate where they do? | Utility cost (e.g. electricity), situation vis-avis competitors, agglomeration advantages, government (dis)advantages-taxes. |
| Maquiladeras in Mexico | Consumer products made geared towards U.S, right on the other side of American border. Benefitted from NAFTA/USMCA - long standing free trade agreement between U.S, Mexico, Canada. |
| Limits of Maquiladeras | Limited amount of multiplier effects and foreign competition low skill development. |
| Export processing zones (EPZ) | Middle income and less developed countries, they want companies to locate here, they draw in companies due to lower labor cost, tariff free input/output, lower taxes, infrastructure provision, less environmental regulations, "flexible" labor laws. |
| Isolines | Lines that connect points of equal value. EX: temperatures that are the same. For us could use it for transportation cost. |
| Isoquant | A curve that shows a combination of input that yield the same level of output |
| Input substitution | When a firm can make a product using different combinations of input |
| If MI > 1 what will happen? | Then the location will be at the raw material site |
| If MI < 1 what will happen? | Then the business will locate at the market |
| If MI = 1 what will happen? | Then the business is locationally indifferent |
| Minimizing transportation cost and minimizing production cost trade off | Economies of scale need a sizeable plant to produce, meaning there wont be one in every rinky-dink town, so you have one plant serving an area to lower production cost while also keeping transportation costs not too high EX: soda plants. |
| Material Index equation | Material Index = Weight of localised material/weight of finished product |
| economies of scale and thermal efficiency | steel mills benefit from economies of scale bc larger furnaces use less energy to cook more steel |
| integrated mill | everything taking place in one mill |
| Von Thunen model | Situation model that assumes undifferentiated plain: (site characteristics are the same everywhere) and one market, etc. And there would be different |
| Ricardo | Focused on site attributes, what land is used for what purpose, does it have good or poor soil? Sufficient rainfall there, climate? Best land is used first |
| What makes you elligible to recieve help and funding from the EU? | if you are less than 75% of the GDP average |
| European Union | North and West is the core, while South and East is the periphery for GDP. |
| Out Migration (Emmigration) and Immigration | Low income in the East means capital investment comes from the West bc of low wages in the East. Out migration can also occur East to West bc more opportunities in the higher GDP West. |
| How to fix declining job issues, especially for de-industrializing regions like the (Rust Belt) | Transfer payments (U.E) benefits, Increase price of regional goods (form subsidies like ethanal mandate), Increase number of employers (government employment, private employers), Increase labor productivity (edu investment, retraining) etc... |
| Resource dependent region | Income inelastic products (agriculture), capitol for labor substitution, declining terms of trade (export price/import price) |
| Recession | Lower demand for labor, or in some cases lower wages but this is usually not the case, wages are usually sticky. Lower wages = lower aggregate spending = lower aggregate demand = lower demand for labor = lower wages. |
| Frictional unemployment | In between jobs, unemployment can never be 0 bc of this. |
| Bigger markets (core) | More differentiated goods - people better off (love of variety). People migrate here for this variety, "real wages" are higher, can put money to consuming goods you actually want. |
| intermediate goods | high GL, differentiated goods (cars) as Ex |
| raw material | low GL, bc it doesnt make sense to export these |
| Grubel Lloyd index | measures the intensity of intra-industry trade (IIT)—simultaneous importing and exporting of similar products within an industry |
| Intra-industry trade | Exchange of products in the same industry. Among more developed countries like varity "Positional", who you are = what you want. Different brands with different associations for different people. |
| Monopolistic competition | Differentiated goods. A car is a differentiated good bc all function the same but not created equal. Ex: Diff size, style, gas mileage, electric, reliability, Each car company has a monopoly on a style of car Ex: Dodge does trucks. |
| Weber model and theory | |
| Openness = | Openness = trade/GDP. Europe high openness, US lower. |
| WTO | governs the rules of trade, since 1995, almost all countries members, Forum for trade negotiations and handler of trade disputes (arbitration, allowing for retaliation). |
| Firm specific reasons for FDI | expertise, brands, global network of suppliers |
| Location specific reasons for FDI | natural resources, access to foreign markets, labor, cultural patterns of FDI |
| Transportation systems | located in a place where there are interstate connections, near population centers, economies of scale, land cost. |
| uniform delivered | Works to negate urbanization economies (not fully). Allows people to telecommute (not have to physically be at a certain workplace.) |
| Silicon Valley | Named after cheaper silicon chips originally produced here. Many spin offs or startups based off one company, joint ventures of two smaller companies. From hardware to internet-based commerce, social media. |
Created by:
JackPitt