Location theory

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The location theory examines the location behavior of economic subjects , in particular which factors are relevant for the choice of a location. The location theory is part of the spatial economy theory in economic geography .

Location structure theories

Location structure theories ask about the optimal arrangement of companies in space and how they change over time. To the location structure theories include the Thünen rings of the Johann Heinrich von Thünen and of Walter Christaller developed central place theory .

Theories of business location choice

Theories of corporate location selection deal with the optimal corporate location, i.e. the location of an individual company.

Fundamental to the problem of the optimal operating location in the free market economy is the profit motive - so where can the highest profit be made? However, the increase in market share, future security and subjective motives play a role that should not be underestimated.

Once these goals have been set, the optimal location can be selected according to these categories. For this purpose, the requirements ( location factors ) must be compared on different spatial levels: Which country is best suited for resettlement? Which region? And finally which church and where exactly?

Neoclassical location theory

In his fundamental work On the Location of Industries (1909), Alfred Weber set up Weber's location model for determining optimal locations for individual industrial operations, which is significantly influenced by the location factor of transport costs. From the beginning, it was critically noted that his model was rather unrealistic. B. an unlimited labor supply or complete information of the decision-makers about the spatial distribution of the markets and the location factors. Weber's theory is also based heavily on transport costs as an essential factor in the location decision and thus neglects all other production factors.

In 1956, Walter Isard Weber's location theory expanded to include Andreas Predöhl's substitution principle and thus converted the location decision into a substitution decision between production factors in a general equilibrium model .

David M. Smith expanded this theory to include a variable profit model, so that all space-dependent costs and revenues of the companies can be considered within the framework of a total model. Smith also introduced aspects such as entrepreneurship, regional policy, and regional taxes into the model.

The neoclassical location theory became more meaningful through its extensions. However, some of the premises criticized by Weber (pure " homo oeconomicus ", complete information, short-term profit maximization) mean that not all actual business location decisions can be satisfactorily explained by neoclassical models.

Behavioral approaches

Theory of Allan Pred

Based on the concepts of diffusion theory by Torsten Hägerstrand (1952–1953) and others who traced the spatial distribution and dissemination of innovations back to learning processes and information processes, Allan Pred developed a new location-theoretical model from 1967 based on a behavioral science approach.

In this model, the quality of decision-making, which it examined empirically, is fundamental for the location decision of the individual company. Pred's conclusions were:

  • The level of information and entrepreneurial performance on the one hand and the quality of the location decision on the other hand are very likely to have a strong positive correlation.
  • Entrepreneurs with the same level of information and the same capacity to use information can choose different locations based on personal preferences or coincidences.

Pred also included time as an additional dimension in his model, as the level of information available to decision-makers can change over time (e.g. due to new communication or information processing technologies, but also due to the possibility of imitating successful entrepreneurs and their location decisions). According to Pred, the decisions of the companies become more and more rational in the long term and work towards a relocation of the business locations to the optimum location.

The behavioral science approach of Preds tried for the first time to understand the actual decisions made when choosing a location. Behavioral explanatory models could be empirically confirmed several times. It was critically noted that psychological-subjective motives for choosing a location were overrated, since the classic location factors hardly play a role in this model and the conditions of physical geography and transport are not taken into account. Just as neoclassical theory neglects the "homo psychologicus", the behavioral approach largely ignores the "homo oeconomicus".

additions

Pred already pointed out the importance of mental and cultural peculiarities for the choice of location. Alf K. Fernau sees strong industry-specific location advantages and disadvantages in these peculiarities. At one location, environmental sectors prefer a regionally predominant ecological way of thinking, heavily work-sharing, labor-intensive sectors prefer a range of highly disciplined employees, investment-intensive sectors a high propensity to save and serious handling of banking transactions, innovation-intensive sectors a risk-taking attitude and open-mindedness.

Finding the location of existing businesses under the conditions of constant economic structural change , which is often not explainable by classical theories , can also be viewed from a behavioral point of view.

Basically, a persistence tendency could be determined empirically: companies try to hold onto their existing location. If the entrepreneur behaved consistently as a profit maximizer, advantageous locations would have to be sought for every investment project . This is offset by the costs of finding and relocating, but for larger investment projects these are often less than the benefits of relocating.

Often instead of relocating, the first attempt is made to compensate for the disadvantages of the old location through rationalization measures, changing the product range, gaining new sales markets, functional division of the company or internal growth and shrinking processes.

These measures are spatially effective and, due to their frequency, often influence the industrial location structure more than the relocation or complete relocation of businesses. In large companies that are active worldwide in the course of globalization , however, the importance of inertia factors is decreasing more and more.

literature

  • Wolfgang Domschke, Andreas Drexl: Logistics: Locations . Oldenbourg, Munich - Vienna 1996 ISBN 3-486-23586-9
  • Alf K. Fernau: site selection as a component of competitiveness. A quantitative tool . DUV, Wiesbaden 1997 ISBN 3-8244-0358-7
  • Peter Gehrung: Spatial settlement disparities. Empirical analysis of determining factors in the context of theoretical location decision considerations . Lang, Frankfurt am Main a. a. 1996 ISBN 3-631-30831-0
  • Busso Grabow, Dietrich Henkel, Beate Hollbach-Grömig: Soft location factors . Kohlhammer, Stuttgart 1995, ISBN 3-17-013734-4
  • Gunther Maier / Franz Tödtling: Regional and urban economics. Location theory and spatial structure . 2nd Edition. Springer, Vienna a. a. 1995 ISBN 3-211-82683-1
  • Markus Pieper: The interregional location choice behavior of industry in Germany. Consequences for municipal location marketing . Schwartz, Göttingen 1994 ISBN 3-509-01658-0
  • Tönu Puu: Mathematical location and land use theory. An introduction . 2nd, revised and expanded edition. Springer, Berlin et al. 2003, ISBN 3-540-61819-8 (on econometric modeling of location theories)
  • Ludwig Schätzl: Economic Geography 1. Theory . 9th edition. Schöningh (UTB), Paderborn 2003 ISBN 3-8252-0782-X
  • Klaus Schöler: Space Economy Theory . Vahlen, Munich 2005, ISBN 3-8006-3218-7

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