The Oxford Handbook Of Economic Geography

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The Oxford Handbook of Economic Geography

edited by

Gordon L. Clark,

Maryann P. Feldman,

and Meric S. Gertler

with the assistance of Kate Williams

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OXFORD

UNIVERSITY PRESS

Great Clarendon Street, Oxford OX2 6DP

OUP is a department of the University of Oxford and furthers the University's aim of excellence in

research,

scholarship, and education by publishing worldwide in

Oxford New York

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and associated companies in Berlin Ibadan

Oxford is a trade mark of Oxford University Press

Published in the United States

by Oxford University Press Inc., New York

© Oxford University Press 2000

except Chapter 2 © Allen J. Scott 2000

The moral rights of the editors have been asserted

First published 2000

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or

transmitted, in any form or by any means, without the prior permission in writing of Oxford University

Press, or as expressly permitted by law, or under terms agreed with the appropriate reprographics rights

organizations. Enquiries concerning reproduction outside the scope of the above should be sent to the

Rights Department, Oxford University Press, at the address above

You must not circulate this book in any other binding or cover any you must impose the same condition

on any acquirer

British Library Cataloguing in Publication Data

Data available

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The Oxford handbook of economic geography / edited by Gordon L. Clark, Maryann P.

Feldman, and Meric S. Gertler; with the assistance of Kate Williams.

p. cm.

Includes bibliographical references and index.

1. Economic geography. I. Clark, Gordon L. II. Feldman, Maryann P. III. Gertler, Meric S.

HF1025 .094 2000 300.9 dc21 00-031353

ISBN 0-19-823410-4

Typeset by Best-set Typesetter Ltd., Hong Kong

Printed in Great Britain by Biddles Ltd.,

Guildford & King's Lynn

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differences between regions with respect to labour, industrial relations, and investment incentives.

These building blocks or pillars inform the overall structure of the book and individual chapters. Not all

contributors necessarily agree with our points of reference. We do think, however, that each pillar

captures a crucial theme evident in the contemporary research in economic geography.

Our intention is to convey a strong sense of the current debates and points of contention surrounding

each of the topics covered in the book, and to show how these debates have evolved as part of a history

of ideas within the field of economic geography. Hence, we asked each author to highlight the most

significant competing and complementary perspectives evident within their field of interest. In so doing,

our aim is to take the reader right to the frontier of contemporary research, while making clear the

connections with past scholarship within and without the disciplines of economics and geography.

Rather than simply survey the literature, we also prompted our contributors to make their own

arguments, and raise the issues they think vital to the field. We asked contributors to consider the

following questions.

1. What are the questions? What are the major problems or issues motivating research in this

particular field? What is the overriding objective of intellectual endeavour by economic geographers?

How does it differ from the approach(es) to the same question as pursued by other social scientists?

2. How did we get there? What is the history of ideas in this field? How has intellectual thought

evolved? Who have been the most influential thinkers? How have their work, and the intellectual

discourse to which they have contributed, shaped this evolution? The intent here is not to provide an

exhaustive review so much as a synoptic vision of the field as it has developed in recent times.

3. What are the contemporary debates? What are the major competing perspectives on each of the

central questions in this field? What are the most significant gaps or 'blind spots'? How is the field

likely to develop in the near future, and what are the most promising avenues forward?

In sum, the Handbook is a series of themes and arguments written to introduce upper level

undergraduates, graduate students, and those new to the field to the crucial issues. We hope it captures

the recent development of the field, and we hope it provides a road map to the most interesting themes

and arguments relevant to the new millennium.

GORDON L. CLARK

MARYANN P. FELDMAN

MERIC S. GERTLER

OXFORD,

SEPTEMBER 1999

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For

Noel, Merran, and Lauren

Richard M. Singer

Anita and Len

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EDITORIAL NOTE

Style and spelling throughout the Handbook reflect the natural idiom of the international team of

contributors. However, English English has been employed in the index.

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PREFACE

Economic geography is a sub-discipline of geography and a growing field of study in economics. It is

concerned with the spatial configuration of firms, industries, and nations within the emerging global

economy in all its manifestations. Historically, economic geography was preoccupied with the spacing

and hierarchical order of settlements, the optimal location for manufacturing and retail activities, and

the geographical structure of trade and communication. In this respect, economic geography was firmly

anchored in location theory and the methods and techniques of optimization associated with mainstream

economic theory. These themes persist in the literature. But they have been overtaken by scholars who

have sought to extend the scope and significance of economic geography by reference to some of the

most important issues in contemporary economic life including globalization, the growth and decline of

regions, innovation, and the restructuring of economic systems.

In economics, economic geography has been heavily influenced by international trade theory. The key

ingredients in its revival in economics have included agglomeration economies, increasing returns, and

imperfect competition. However, no single unifying theory or approach yet commands the centre of

economic geography. There are significant differences between geographers and economists just as

there are significant differences amongst geographers and economists. The field is alive with new

research and debate about the proper scope and prospects for economic geography. This debate has

been joined recently by historians, political scientists, and business theorists from around the world.

Economic geography has come to be seen both as a crucial area of innovation in the social sciences and

an essential reference point in the debate about the processes of global economic change, innovation,

finance, and the future of whole cities and regions over the coming century.

The Oxford Handbook of Economic Geography aims (1) to capture the scope of the field, and its main

threads and arguments. Our ambition is (2) to be a key interdisciplinary reference source for this

burgeoning field, as well as (3) contributing to the ongoing evolution of the field. In a nutshell, we hope

the Handbook will (4) serve to define the field in much the same way other handbooks have done for

their fields, intersecting with economics, sociology, and institutional and organizational research. The

team of editors and contributors

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combine a wide scope of research strengths and experience internationally recognized in geography and

economics as well as in urban studies and planning, business studies, and public policy.

This project is informed by a commitment to three basic building blocks or intellectual pillars. These

building blocks are widely shared by geographers and economists though not always articulated or

agreed and often contested and disputed. The first pillar is a commitment to recognizing the diversity of

economic life, including the significance of gender, race, and spatial differentiation in market

economies. For many years, economic geographers sought to generalize their findings by assuming

regions (or other spatial units of economic analysis) were much the same. They tended to ignore the

heterogeneity of places and peoples in a search for universal principles. In recent years, the challenge

has been to develop analytical tools that are at once sensitive to differentiation and amenable to a more

general understanding of the evolution of the economic landscape. For some analysts, difference and

the heterogeneity of the economic landscape demand close, detailed analyses of the particular attributes

of certain firms, regions, and industries. For others, particularity has to be balanced against larger

economic forces operating at higher spatial scales: there is a tension between the local and the global

and between fine-grained case studies and stylized facts.

A second pillar is a commitment to understanding the processes of change in and across the economic

landscape. Traditional models of location, focused upon the logic of settlement patterns and the

structure of trade, assumed a given economic landscape in the context of stable, predictable economic

forces. Clearly, economic systems are now subject to global shifts and changes in competitive

conditions affecting both the place of a region in the larger economic system and the viability of local

systems of production. Of course, there has been debate about the extent of penetration of nations'

economic systems by economic forces operating at a number of scales. Understanding the place of

London in the world economy is different from understanding the place of Detroit in the North

American economy. The challenge is to be sensitive to the interaction between spatial scale and

competitiveness in the context of accelerating rates of economic change.

The third pillar is a commitment to understanding the geographical and institutional organization of

economic activity given marked differences in regions' cultures, institutions, and regulations. Past

theories of location have treated the firm, the community, even whole regions and nations as

undifferentiated 'black boxes'. While entirely appropriate if the goal is theoretical simplicity, recent

research in economic geography across the disciplines aims to make a connection between the theory of

the firm (for instance) and its cultural, social, geographical, and institutional contexts. Understanding

the different rates of adoption of technology requires not only an appreciation of the nature of the firm,

but also the particularities of its locational context, given striking

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ACKNOWLEDGEMENTS

We should first acknowledge the help and encouragement of our colleagues at Oxford University Press.

Andrew Lockett, now the publisher at the British Film Institute, encouraged us to begin the project.

Over the course of the project, Dominic Byatt eased its progress through the publishing process, helping

us to transform an almost impossibly ambitious project into reality. His enthusiasm and the support of

the Press have been very important. We should also thank the Press's anonymous referees for their

comments and advice; they contributed words of support and points of advice and clarification.

The book was supported by Oxford University. In particular, the resources of the School of Geography

have been essential in sustaining the project. Here, we were helped immensely by Pat Woodward's

intervention at a crucial stage of the process. As well, Jan Burke has shown, once again, her superb

organizational skills. She made the links, and sustained the flow of communications and files between

the editors and the contributors. On the face of it, electronic networking ought to make these kinds of

global projects routine and easily managed. But as we all know, taming the electronic world requires

imagination and persistence.

Having set the book's agenda, established links with our contributors, and having received drafts of

papers, the project was realized as a book in collaboration with our editorial manager, Kate Williams.

Her clear eyes, her sense of the place of each contribution in the book, and her commitment to the

project made all the difference to realizing it in a manner that has made it an enjoyable partnership. For

this we are all very grateful. On this point, we would also like to thank our contributors who have

supported the project with enthusiasm. When we first cast the Handbook as an untried idea, we found

many willing to make a commitment to contribute to it. We are very grateful for their vote of

confidence. Likewise we are also grateful to our contributors for responding in a timely and patient

fashion to our comments, and the many demands of the editorial and production processes.

So, finally, we would like to record our appreciation for the support given to the project by the late

Bennett Harrison. He played an important role in the initial stages of the project, suggesting

contributors and clarifying the goals of

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the book. Much has been written of his contributions to economics and geography, by his many friends

on both sides of the disciplinary divide. We are saddened by his loss, and hope the book reflects what is

possible in terms of collaboration at the intersection of economics and geography.

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CONTENTS

The Editors xvii

The Contributors xix

Introduction 1

1

Economic Geography: Transition and Growth

Gordon L. Clark, Maryann P. Feldman, and Meric S. Gertler

3

2

Economic Geography: The Great Half-Century

Allen J. Scott

18

Part I

Conceptual Perspectives

Section 1

Mapping the Territory

3

Where in the World Is the 'New Economic Geography'?

Paul Krugman

49

4

Doing Regulation

Jamie Peck

61

Section 2

Analytical Frameworks

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5

The New Economics of Urban and Regional Growth

Edward L. Glaeser

83

6

Geography or Economics? Conceptions of Space, Time, Interdependence, and

Agency

Eric Sheppard

99

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Part II

Global Economic Integration

Section 3

Investment and Trade

7

The Geography of International Investment

Howard J. Shatz and Anthony J. Venables

125

8

Globalization, Localization, and Trade

Michael Storper

146

Section 4

Development and Underdevelopment

9

Climate, Coastal Proximity, and Development

Andrew D. Mellinger, Jeffrey D. Sachs, and John L. Gallup

169

10

The Great Tablecloth: Bread and Butter Politics, and the Political Economy of Food

and Poverty

Michael J. Watts

195

Section 5

Finance Capital

11

The Regulation of International Finance

Risto I. Laulajainen

215

12

Finance and Localities

Adam Tickell

230

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