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Factors affecting industrial locationAn introduction
Location conditions & location factors Location conditions = the differences among locati
on that exist for all industries Location factors = specific importance that is attac
hed to such differences by individual firms when choosing locations for specific factories
Nishioka and Krumme (1973)
What places offer industry? (location conditions) Physical environment: land, raw material, power r
esources, water supply Cultural environment: capital, labour, technology, t
ransport, government aids, financial & insurance supports
What industry seeks in places? (location factors) Dominating effect on the location Institutional (government policy of China on industr
ial location), industrial inertia, transport, raw materials, power supply, labour (cost reduction)
Location factors
Location factors are dynamic Changing over time Decline/increase in importance
Example: Iron and steel industry
Industrial inertia
Plants may be located at non-optimal sites in order to utilize existing infrastructure.
Which factor(s) is/are important?
No single factor stands alone Several factors operate
simultaneously
Is it possible to find an ideal location? NO But it is possible to find locations where
advantages > disadvantages
Footloose industries However, some industries are not tied to any of th
e particular locational factors Example: brick-making, IT industries
Who is the decision maker? What are their major concerns?
Industrialists Government
Cost reductionProfit-making
For the welfare of people of the nation (social consideration)
Industrial decentralization in China
Reference Raw, Michael (2000), Manufacturing Industries: th
e impact of change, Second Edition, London: Collins Educational
Roger Hayter (2004), Dynamics of Industrial Location, Simon Fraser University