Industrial Organization and Location: Division of Labor, the Firm, and Spatial Process

Abstract

The paper opens with a description of the division of labor within the firm. The argument then passes on to the question of the vertical disintegration and integration of production and its crucial relations to (a) economies and diseconomies of scope and (b) the costs of intra- and inter-firm transactional activity. An attempt is made to synthesize these issues by providing a unified description of the organization of industry and the theory of the firm. The implications of this synthesis for location theory and spatial analysis generally are described. Two specific geographical problems are addressed, namely, (a) the origins and dynamics of growth centers and (b) restructuring and the multiestablishment firm. The paper closes with a few brief allusions to a prospective research agenda for economic geographers.