ABSTRACT
This chapter updates the level of understanding about how the local factors shape the development of the collection of regional industries. It focuses primarily on the factors that contribute to on-farm net revenues of operations. The chapter looks conceptually at which the factors contribute to financial performance, and hypothesizes why these characteristics exist where they do and what the market forces might influence them in the future based on the spatial patterns within maps illustrating differential levels of financial performance in the western United States. The spatial patterns of profitability in the results of this chapter show which western US locations have been able to capture comparative advantages that still have some absolute advantages in the market for the commodities produced in those locations. The spatial dependence can occur due to the economic factors such as spillover effects, agglomeration effects, spatial diffusion, and geopolitical effects.
