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A Note on the Geographic Interdependencies of Retail Market Areas
Author(s) -
Mushinski David,
Weiler Stephen
Publication year - 2002
Publication title -
journal of regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.171
H-Index - 79
eISSN - 1467-9787
pISSN - 0022-4146
DOI - 10.1111/1467-9787.00250
Subject(s) - interdependence , tobit model , hierarchy , economic geography , competition (biology) , location theory , urban hierarchy , supply and demand , business , market size , industrial organization , economics , microeconomics , commerce , econometrics , market economy , ecology , population , demography , sociology , political science , law , biology
Central place theory describes an orderly hierarchy of places, with particular retail services developing for lower‐ordered places as they reach a threshold. Yet it is likely that nearby areas could serve simultaneously as a source of demand and a source of competing supply for retail stores in a place. This paper contributes to the understanding of local economic development by modeling and estimating the geographic interdependence between a place and its neighboring areas. The simultaneous equation Tobit results suggest that such geographical interdependence exists for most retail industries, with spatial competition on the supply side being particularly important.