REM 520 Chapter 3: Ch3- Why do firm’s Cluster
18 Nov 2017
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Document Summary
Agglomeration economies, the economic forces that cause firms to locate close to one another in clusters. The forces acting on firms in a single industry together are called localization economies. When agglomeration economies cross industry boundaries, they are called urbanization economies: idea is that the presence of firms in one industry attracts firms in other industries. Not all industry clusters occur because of agglomeration economies: for example beet sugar production facilities are concentrated in beet growing areas. The production of buttons (an intermediate input), is summarized in three assumptions.
