Economic Geography Glossary



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International Monetary Fund:
"The IMF is an international organization of 182 member countries, established to promote international monetary cooperation, exchange stability, and orderly exchange arrangements; to foster economic growth and high levels of employment; and to provide temporary financial assistance to countries to help ease balance of payments adjustment."


Economic Impact Analysis: Glossary of Selected Terminology Relating to Input-Output (I-O) Models and Economic Impact Analysis; [by Gary A. Horton, Economist]


Information and communication technology

Import substitution

I.S. as a process refers to situations where regions (more precisely, existing or new economic activities within regions) take up the production of goods or services which formerly were imported, but, for whatever reasons, now can be viably produced within the region (e.g. as a result of population increases leading to increases in demand [see: "threshold"] or as a result of productivity increases resulting in greater competitiveness). Import substitution is often discussed as a policy strategy, e.g. as an attempt to utilize underused capacities, reduce regional unemployment or protect infant industries. "This form of economic protectionism helped some countries industrialize in the past but involves economic risks." (namely potential inefficiencies and higher prices) (Stutz, 1998, p.16)

Income elasticity of demand

Assuming that all prices are constant, the change in quantity demanded of a consumption good relative to a change in income [see also: Engel's Law]


suggests that some locations, especially cities, serve to 'incubate' new firms, which may subsequently move to other locations. Incubators are areas which provide services which are essential for the operations of small new firms and which cannot be provided internally. [See also Hayter, pp.226ff.]

"Independent Variable"

the "explanatory" variable, i.e. the variable which "explains" the dependent variable in a statistical relationship or a logical (deductive) model without necessarily implying any strict causal connection. A change in the independent variable will lead to a change in the dependent variable. [see also "dependent" variable, and: Goodall, p.494 (under "variable")]

Independent Sector
See: Third Sector

Indifference curve

the sequence of points representing alternative combinations of goods and/or services among which the consumer is indifferent (at a specific utility level or level of satisfaction). There are many such indifference curves, each pertaining to a different level of satisfaction. Such indifference maps lie at the core of the theory of consumer behavior, since they represent consumers' tastes and preferences. The conventional model of consumer behavior assumes that indifference curves are convex, i.e. that a specific indifference curve lies above its tangent.

Indifference curves with price line [Graph; ENCYCLOPAEDIA BRITANNICA]

"Induced" effects (in local economic analysis [as different from "indirect effects"]):

those income or employment effects which are triggered by household consumption expenditures; as different from "indirect effects" which are the result of backward inter-industry (supply) linkages. In input-output analysis, induced effects are identified by "closing the direct-requirements table with respect to the household sector before Leontief coefficients are computed


(as different from "deduction") A process of reasoning ("generalizing") leading from the observation and recording of particular cases to general conclusions or "laws". [see Goodall, p.229]

Industrial district

"A localized network of producers bound together in a social division of labor, in necessary association with a local labor market." (A. Scott, 1992, p.266) Some authors emphasize the small-firm characteristics of the i.d: "a terrorial system of small and medium-sized firms' (Goodman, 1989), others the fact that research of the i.d. shifts the emphasis from the characteristics of the single firm to those of the place, territory or regional system of which the firm is a part. (Asheim) [see also Hayter, pp.329ff.]

Industrial park

A well demarkated, often governmentally encouraged and subsidized industrial real estate development providing basic industrial infrastructure facilities, developed sites which can be purchased or buildings which can be leased, designed to attract industrial job providers to locations separate from, yet accessible to residental areas.

Industrial inertia

tendency to continue to invest and reinvest at an already existing location even if such a location would be non-optimal for a new location decision. The concept appears to have its roots in Allan Rogers' investigation of the U.S. steel industry and the effects of basing-point pricing and freight absorption on the location pattern of this industry (see his "Industrial Inertia -- A Major Factor in the Location of the Steel Industry in the United States," Geographical Review 42(1), 1952, pp.56-66). See also sticky place.

Industrialization economies

a type of agglomeration economies; = external economies (= benefits, savings, cost reductions) resulting from the spatial concentration of industrial activities (e.g. from their joint utilization of local industrial infrastructure); as different from, or overlapping with: localization economies; urbanization economies.

Industry-mix effect

In shift/share analysis: see "Proportionality Effect"

A term M. Polanyi used to suggest that "human being create knowledge by involving themselves with objects, that is, through self-involvement and commitment..." (Nonaka & Takeuchi, The Knowledge-Creating Company, p.60)

Infant industry

An industry at an early stage of its development. Concept often related to the need for tariff protection or agglomeration economies during and (for some time) after "incubation".

"Informal Economy"

A reference to those parts of the economy which operate without official recognition or with only ambiguous or tenuous ties to governmental institutions; activities operating outside the regulatory and often also outside the taxation system.


Informational cascades

economic actors improve on their limited private information by observing and mimicking the actions of others.

Informational city (Castells) [see also Storper, 1997, pp.236-41].

Information vs. Informational Society

Castells distinguishes between "information" and "informational" in the context of Information Society (Economy) and Informational Society (Economy). "Information", in this association, relates to the role of information in society or the economy, while "informational" is supposed to signify a deeper meaning, one which expresses the new social organization "in which information generation, processing and transmission become the fundamental sources of productivity and power..." (Castells, The Rise of the Network Society, 1996, p.21, footnote 33) Today's economy is not just founded on information, but it is informational, "because the cultural-institutional attributes of the whole social system must be included in the diffusion and implementation of the new technological paradigm." (Castells, op.cit., p.91)


"A derivative condition that arises mainly because of uncertainty and opportunism, though bounded rationality is involved as well. It exists when true underlying circumstances relevant to the transaction, or related set of transactions, are known to one or more parties but cannot be costlessly discerned by or displayed for others." (Williamson, Market and Hierarchies, p.31) Particularly significant when there are sellers, buyers and intermediaries.

Information Literacy: [alternative definitions]
Implicit in a full understanding of information literacy is the realization that several conditions must be simultaneously present. First, someone must desire to know, use analytic skills to formulate questions, identify research methodologies, and utilize critical skills to evaluate experimental (and experiential) results. Second, the person must possess the skills to search for answers to those questions in increasingly diverse and complex ways. Third, once a person has identified what is sought, be able to access it. (p. 314)
Lenox, Mary F. and Michael L. Walker. (1993) Information literacy in the educational process. The Educational Forum. 57(2):312-324.

Initial advantage

Often used concept in the context of cumulative causation. In geography, E.L.Ullman suggested the importance of the momentum created by an early start e.g. in the creation of large-scale markets or in the process of development. "This fact may signal the operation of a general localization principle in man's use of the earth: initial location advantages at a critical stage of change become magnified in the course of development." (In a footnote Ullman adds: "For a similar concept note Gunnar Myrdal, Rich Lands and Poor, 1957, pp.26-27 which reads in part...." [Ullman, E.L., "Geographic Theory and Underdeveloped Areas," ch.II, in: Norton Ginsburg, ed., Geography and Economic Development, Chicago 1960, p.28]

Initial Public Offering (IPO)

Selling corporate stock to the public for the first time. First, stocks are sold in the primary market at an offering price determined by the syndicate; thereafter the shares are traded in the secondary market or what is called the aftermarket. More!

In-migration effects and 'chains of opportunity'

A.Pred, City Systems in Advanced Economies, p.29

(Schumpeter): the setting up of a new production function... innovation combines factors in a new way .... or carries out new combinations. (Thomas, 1985)

Input-Output Analysis

Basic Concepts in Input-Output Analysis:
  • Transaction- or Flow Table: Table of purchase and sales transactions between "industries" within a (regional) system and with the outside (Imports and exports) organized as a matrix with rows (sales) and columns (purchases).
  • Table of Direct (Input) Coefficients: measuring direct (backward) links or effects
  • Table of Direct & Indirect Coefficients: measuring direct & indirect [inter-industry] effects
  • Table of Direct, Indirect and Induced Coefficients: "induced" effects are the result of extending the tracing of indirect effects "through" households, i.e. taking the additional direct and indirect effects into account which are based on household expenditures

Institutional Thickness

A reference to the institutional structure and qualities of institutions of a region, more specifically the presence, interaction, collective action (lack of inter-institutional conflict) and legitimacy of institutions in a region. [Rdg: Martin, Ron. "Institutional Approaches in Economic Geography," in: Sheppard, Eric and Trevor J. Barnes, eds., A companion to economic geography. Oxford, UK ; Malden, Mass. : Blackwell Publishers, 2000 [Chapter 6, pp.77f.] [Suzzallo/Allen Stacks HF1025 .C66 2000]

Intelligent Enterprise
Such enterprises are "converting intellectual resources into a chain of service outputs and integrating these into a form most useful for certain customers." (Quinn, p.213)

Intensity of land use

factor inputs (capital, labor, fertilizer etc.) per unit area of land, generally yielding high returns per unit area of land, as, e.g., in "intensive agriculture" (as different from "extensive land use" and "extensive agriculture")

This use of the term "intensive" should not be mixed up with its use in "a land-intensive activity" where the denominator is not the unit of land but the activity. Thus, a land-intensive activity uses a relatively large amount of the factor "land" relative to other factors of production (capital, labor etc.) per unit of output or activity. For example, agriculture (generally speaking) is a relatively land-intensive type of activity. However, "extensive agriculture" (i.e. an agricultural activity which uses land "extensively") is, by definition, a more land-intensive type of activity than "intensive agriculture" (referring to agricultural activities which use land intensively). Confused? Read again and/or see your instructor!

Intensive agriculture

System of farming characterized by relatively high levels of factor inputs (capital [including fertilizer] and/or labor] per unit of land.

Interaction: The Bases for Transportation and Interaction (Ullman)

"Transport is seldom. improved without a demand. Many immigrants came to the United States before the steamboat was perfected, and settlers began to push across the Appalachians before the Erie Canal or the railroads were built (Healy, 1947). Improvements in transportation alone, although important, were not as a rule responsible for the whole of increased interaction between places. What, then, are the conditions under which interaction develops? The following three-factor system is proposed for explanation." (Source)
see: Complementarity, Intervening Opportunities and Transferability

Intermodal Transport System



Ability of diverse intelligent devices to communicate with one another in performing meaningful tasks [Leebaert, D., Technology 2001, p.156]
[a network that provides connectivity without interoperability provides the "plumbing" to communicate anything, anywhere, any time, but not the intelligence to do so] Usually referring to the computational and organizational facets needed "for coupling models, knowledge, functionality, and human activities" within and between organizations (such as "across scientific disciplines and within different branches of individual disciplines"). (Quoted and adapted from NSF 1998 Website on "Knowledge Networking")

Intervening opportunity (Ullman, see also "Interaction")

"Complementarity ... generates interchange between two areas only if an intervening source of supply is unavailable. Thus, sixty years ago, few forest products moved from the Pacific Northwest to the markets of the interior Northeast, primarily because the Great Lakes area pro- vided an intervening source. Florida attracts more amenity migrants from the Northeast than does more distant California. It is probable that many fewer people go from New Haven to Philadelphia than would be the case if there were no New York City in between. This, presumably, is a manifestation of Stouffer's law of intervening opportunity (1940), a fundamental determinant of spatial interaction.... Under certain circumstances intervening opportunity might ultimately help to create interaction between distant complementary areas by making construction of intermediate transport routes profitable and thus paying part of the cost of constructing a route to the most distant source.... Intervening opportunity, ... would (also) seem to facilitate rather than check the spread of ideas. Similarity of two regions also probably would facilitate the spread of ideas more than difference or complementarity, although the latter would be important in some cases." (Source)

Intra-firm (international) trade

Flow of imports and exports of goods and services across national boundaries between different components of a corporate network (e.g. between home-country parent firms and their foreign affiliates)

"U.S. exports of goods involving U.S. parents, their foreign affiliates, or both accounted for 65 percent of all U.S. exports of goods (in 1996) Intra-MNC exports (goods shipped by U.S. parents to their foreign affiliates) accounted for 40 percent of the MNC-associated exports...
U.S. MNC's accounted for 40 percent of U.S. imports of goods. Intra-MNC imports (goods shipped by foreign affiliates to their U.S. parents) accounted for 42 percent of these MNC-associated imports."
From: Mataloni, Raymond J,,
U.S. Multinational Companies Operations in 1996 From the September 1998 SURVEY OF CURRENT BUSINESS

Invisible trade (imports or exports of a region or country)

Trade in non-commodity services such as finance (banking, insurance etc.), communications, transportation or tourism.

Isocost curve

Also called iso-outlay line. A line (curve) representing the different combinations of factor inputs (such as labor and capital) that can be purchased given the prices of these inputs and the total outlays. Superimposing the relevant isocost curve on the map of isoquants, we can determine which combination of our inputs will maximize the output for the given outlays.


Points of equal additional transport costs around the (Weberian) minimum-total-transport-cost point. (Goodall, p.247)
'Isodapane is a ... technical term introduced by Alfred Weber. It is constructed in analogy to the geographical term "isotherm." Similar words are current in scientific literature. Isodapane contains besides the well-known root isos, "equal," the word dapane, which means "expense," "cost."' (explanation provided by the editor [Carl J. Friedrich] of the 1929 English translation of Weber's book [Theory of the Location of Industries], in a footnote on page 102).
While the isodapane is a theoretical tool, its theoretical function very much agrees with real-world decision-making processes as sequential processes, in that it assists in the iterative sorting of alternative locations and the move from initial, hypothetical suboptima to eventual, more general ("global") optima.
[See also
Critical isodapane and Alfred Weber]

Iso-outlay line: see "Isocost Curve" and Spatial Iso-Outlay Line


the curve representing all possible efficient combinations of inputs needed to produce a certain quantity of a specific output or output combination


Term used by Tord Palander (following Schilling) to refer to the boundary between two market areas served by two market centers with varying prices and transport costs. The isostante specifies the points with equal delivered prices from both centers. [See Claude Ponsard, History of Spatial Economic History, p.51]


Line connecting points which are subject to equal transport cost for given materials (or products) around a point of supply or around a market. Isotims are the basis for calculating aggregate "isodapanes". [for more, see Dicken & Lloyd, Location in Space, p.97]

Isotropic (plain) [Oxford Dictionary]

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