TRANSPORTATION AND THE SPATIAL DISTRIBUTION OF ECONOMIC ACTIVITY

CERTAIN ASPECTS OF SUBURBANIZATION ARE DISCUSSED. THIS TERM IS USUALLY TAKEN TO MEAN A A MOVEMENT OF POPULATION AND ECONOMIC ACTIVITY OUT OF THE CENTRAL CITY TO THE SUBURBS. THE INTRA-METROPOLITAN AREA DISTRIBUTION OF MANUFACTURING IS EMPHASIZED IN THIS PAPER. CHANGES IN THE GEOGRAPHIC DISTRIBUTION OF MANUFACTURING PLANTS WITHIN THE METROPOLITAN AREA REFLECT A COMPOSITE OF DIFFERENT TYPES OF INVESTMENT DECISIONS BY MANY FIRMS. THE DISBURSAL OF MANUFACTURING ACTIVITY FROM THE INNER ZONES OF THE CENTRAL CITY WAS CLEARLY A DOMINANT TENDENCY IN PLANT LOCATION DURING THE PAST DECADE. IT IS BELIEVED THAT MARKED GROWTH THAT HAS TAKEN PLACE AT THE FRINGE OF THE CITY IS RELATED TO TRANSPORTATION: FIRMS PREFER TO REMAIN WITHIN THAT ZONE OF THE CITY KNOWN AS THE COMMERCIAL ZONE BECAUSE THERE ARE TRANSPORT COST ADVANTAGES. THE SEED-BED HYPOTHESIS IS CONFIRMED BY THE LOCATIONAL TENDENCIES OF NEW SMALL PLANTS WHICH TEND TO LOCATE IN THE INNER CITY. THE LOGIC OF THE HYPOTHESIS IS PRESENTED IN THE FOLLOWING PROPOSITIONS: (1) NEW SMALL FIRMS LACK THE CAPITAL TO CONSTRUCT THEIR OWN FACILITIES AND MUST DEPEND ON LEASE SPACE, (2) THE FARTHER A FIRM IS FROM CBD, THE MORE IS THE LIKELIHOOD THAT IT WILL HAVE TO INTEGRATE VERTICALLY AND PROVIDE ITSELF WITH MANY AUXILIARY SERVICES, (3) SMALL FIRMS ARE MORE LIKELY TO OBTAIN LOANS ON REASONABLE TERMS IN THE CORE AREA BECAUSE BANKING IS MORE COMPETITIVE, AND (4) A SMALL FIRM ON THE OUTSKIRTS OF THE CITY IS LESS LIKELY TO BE ABLE TO DRAW ON THE LARGE POOL OF UNSKILLED, LOW-WAGE LABOR FOUND IN THE INNER PORTIONS OF THE CITY. THE IMPLICATIONS OF THIS HYPOTHESIS ARE DISCUSSED WITH RELATION TO URBAN RENEWAL.