Abstract
Economic globalization gives rise to a harsher cost competition among manufacturing firms. It follows that manufacturing firms’ production processes are fragmented into small blocs, which are scattered over a large geographical space. The locations of factories that use the fragmented production processes are usually near cities because workers’ daily lives are sustained by the many kinds of retailers and social facilities available in cities. Workers’ lives are not only sustained by cities but also city systems within a region. The structure of a city system affects the production efficiency of firms through the quality of laborers’ daily lives. The city system has become important to manufacturing firms, which select a region in a large geographical area for the location of their factories.
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