An investigation of market areas and supply areas : an integrated framework
The concern of the thesis is to clarify the structural relevance between market areas and supply areas through the investigation of firm location under the given conditions of market demand, deposit of inputs and technologies for production. Conventional economic analysis studies a solid interaction between input and output, through the structure of the production function, by means of the duality theory in the input-output framework. This corresponds to the framework of market areas and supply areas in location theory. However, the existing market-area analysis and supply-area analysis focus examination on an independent framework, and a series of approaches has not been sufficiently developed. Although the integrated framework of both types of area would be treated as an extended version of the duality theory, the framework would not be complete unless the analysis took additional spatial factors into consideration. These factors are suggested to be parts of spatially unconstrained and constrained internal and external economies. The spatially constrained types of economies are called agglomeration economies and these, together with spatially unconstrained types of economies, constitute the neglected factors in existing market-area analysis and supply-area analysis. As agglomeration economies have a trade-off interaction with transportation costs, an analysis of assembly and distribution transportation costs is also required. This research clarifies these neglected factors and considers them with the duality theory, applying the input-output framework to both types of area analysis. This alternative approach not only demonstrates the effects of market area change on the spatial structure of supply area and vice versa, but also investigates the incentives governing the determination of the firm location.