Agglomeration explains why certain cities and regions can attract businesses even in the absence of obvious geographic advantages.

Question

Quizplus · Accepted Answer

Agglomeration refers to the concentration of economic activity in a particular region, often due to the benefits of being located close to other businesses in the same industry. This can create a cluster of related businesses that benefits from economies of scale and knowledge spillovers, even if the region is not geographically advantaged in other ways (e.g. natural resources, transportation infrastructure).

Agglomeration Explains Why Certain Cities and Regions Can Attract Businesses