ABSTRACT
The location strategies for large corporations have always been important for cities. Specifically, the firm's particular supply chain, including both materials and labor, often governs its location decisions. In other words, a business's location is dominated by factors related to the proximity of both labor and material supply. This chapter describes how decisions involving the siting of firms play out in three respects. Given that there are extensive accounts of firm location behavior, it offers only thumbnail descriptions to highlight important elements of dominant theories. The chapter first describes central tenets of industrial location theory. It introduces the concept of agglomeration economies. Weber's model, however, also considered two other factors that are increasingly important in the location decisions of firms: agglomeration and labor. The standard urban economics model of employment location is derived from basic principles of classic land economics, bid-rent theory, and traditional transportation–land use interactions first introduced by Johann Heinrich von Thunen almost two centuries ago.
