What drives globalization in the economy?
- division of labor and specialization
- comparative advantages (Ricardo’s theory)
- technological advancements
What are the criteria for regions?
Homogeneous Regions: shared characteristics, problems, interests (e.g. Alpine Rhine Valley)
Functional Regions: social and economic interdependencies
Institutional Regions: Politically defined boundaries
Regions of Perception: Subjective or symbolic significance
What are regional disparities and why are they important?
- disparities refer to inequalities or differences between regions (demographic, economic, social aspects)
- important because they help understand functional relationships, reveal spatial change and guide political and regional planning decisions
What are the two types of regional disparities?
- inequalities leading to injustice (negative connotation, such as income inequality)
- inequalities as regional characteristics (value-neutral, such as cultural diversity)
How has disparity analysis evolved historically?
- classic areas: population, income, employment
- expanded areas: public goods and infrastructure quality
- comprehensive assessments: include quality of life and sustainable development measures
What are the hard and soft factors of location:
Hard factors: taxes, research institutions, proximity to subcontractors, accessibility etc.
Soft factors: regional image, social climate, cultural offer, gastronomic offer, criminality etc.
What are the two main perspectives on regional growth differences?
- Convergence: regions with lower economic development levels catch up over time, reducing disparities
- Divergence: Disparities increase due to advantages like agglomeration effects in specific regions
How does the neoclassical approach explain regional growth differences?
- disparities arise temporarily but diminish over time
- capital and labor flow to less developed regions with higher returns
- movement toward equilibrium leads to balanced growth
What are agglomeration economies?
- benefits that arise from the spatial concentration of firms, industries, and people
- two main types: localization economies and urbanization economies
What are agglomeration diseconomies?
negative effects of excessive concentration, such as congestion, high costs, and environmental degradation
What is a cluster in regional growth theory?
- a spatial concentration of interconnected firms, suppliers, and institutions in a particular field
- clusters drive innovation, competitiveness, and economic growth
Name the four types of clusters and explain each
Geographic cluster: firms located in the same area benefiting from shared infrastructure (e.g. Ruhr industrial region in Germany)
Sectoral cluster: firms in the same industry forming supply chain linkages (e.g. Detroit automotive cluster)
Functional cluster: concentration of high-value economic activities (e.g. Basel pharmaceutical hub)
Innovation cluster: networks focused on research and development (e.g. Cambridge biotech cluster)
What is Porter’s Diamond Model?
a framework for understanding the competitive advantages of regions, focusing on four determinants:
- factor conditions: availability of specialized labor and infrastructure
- demand conditions: local market size and sophistication
- related and supporting industries: presence of interconnected sectors
- firm strategy, structure and rivalry: local cometition driving innovation and efficiency
What explains uneven spatial growth distribution?
Agglomeration economies (external):
- economies of localization: cost advantages from the localization together of firms in the same industry
- economies of urbanization: cost advantages from urban location close to economic activity (proximity to a market, labor supply, good communications etc.)
Agglomeration economies (internal):
- economies of scale: cost advantage of a firm due to scale of operations (cost per unit of output decreasing with increasing scale)
- economies of scope: cost savings of firms from variety (diversified products)
What are the implications of spatial concentration for regional policy?
- policies need to balance growth between core and peripheral areas to reduce disparities
- investment in infrastructure and connectivity can spread economic benefits
How does infrastructure influence regional growth?
- reduces transportation costs, improving connectivity
- expands labor markets and business opportunities
- encourages agglomeration effects, boosting productivity
What are the wider economic benefits of improved regional infrastructure?
- increased GDP per capita
- higher labor productivity
- expanded business and labor markets
What is land rent?
- income from land ownership, derived from total revenue minus labor and capital costs
- includes location rent, based on proximity advantages
What does the Thünen Model explain?
- land rent decreases with distance from the center
- different land uses occupy concentric zones based on rent-paying capacity
What factors affect land rent?
- transportation costs
- demand for goods/services
- urban expansion
Why is controlling spatial development important?
- prevents inefficient land use and urban sprawl
- promotes sustainable densification
- mitigates segregation
What are the key drivers of housing market supply and demand?
- supply: land availability, building costs, and infrastructure
demand: demographics, income, and lifestyle preferences
How does land rent influence spatial structure?
- high rents near the center lead to dense urban development
- peripheral areas are characterized by lower-intensity uses
How does the levy tax on added land value work?
- taxes the increase in land value due to zoning changes
- at least 20% of the added value is taxed under Swiss law
- funds are used for public infrastructure and ecological projects
