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EASURES,ANDDISCUSSSOMEOPENRESEARCHAREAS4FOREXAMPLE,DURANTONANDOVERMAN2005STARTFROMACONTINUOUSSPACEAPPROACHTODETERMINETHEDEGREEOFSPATIALCONCENTRATIONOFVARIOUSINDUSTRIALSECTORS,WHEREASMORIETAL2005PROPOSEANINDEXOFINDUSTRIALLOCATIONTHATCANBEDECOMPOSEDINTOCOMPONENTSREPRESENTINGLOCALIZATIONATVARIOUSLEVELSOFSPATIALAGGREGATION459KBEHRENS,JFTHISSE/REGIONALSCIENCEANDURBANECONOMICS372007457–465

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MAYSEEMMOREAPPROPRIATEWHENWEWANTTOWORKATAVERYDISAGGREGATESPATIALLEVEL,ITSEEMSNATURALTOTHINKOFAREGIONALSYSTEMASBEINGFORMEDBYAFINITESETOFREGIONSFURTHERMORE,NEGSHOWSTHATEVENWHENLOCATIONSPACESARECONTINUOUS,ECONOMICACTIVITYUSUALLYCLUSTERSINTOAFEWPLACES5THISLEADSUSTOBELIEVETHATTHEOPERATIONALLYFEASIBLEANDTHEORETICALLYDESIRABLEREPRESENTATIONOFAREGIONALSYSTEMISINTERMSOFAGRAPHNOTETHATTHISISTHEAPPROACHTHATHASBEENCHOSENFORALONGTIMEINLOCATIONTHEORYBECKMANNANDTHISSE,1986INDEED,GRAPHSOFFERANATURALREPRESENTATIONOFFINITESYSTEMSOFAGENTS/NODESWHICHINTERACTWITHEACHOTHERTHROUGHLINKSITALSOFITSWELLTHEINTERMEDIATESPATIALSCALECONSIDEREDINREGIONALECONOMICSINASPATIALECONOMYWITHAFINITENUMBEROFREGIONS,WEKNOWFROMSTARRETTSSPATIALIMPOSSIBILITYTHEOREMTHATTHECOMPETITIVEMARKETMECHANISMBREAKSDOWNWHENTHEMOBILITYOFFIRMSAND/ORHOUSEHOLDSISCOMBINEDWITHTHETRANSPORTCOSTSOFGOODSBETWEENREGIONSHENCE,UNLESSSTRONGSPATIALHETEROGENEITIESAREASSUMEDTOBEGIVENAPRIORI,THEQUESTIONOFWHEREECONOMICACTIVITYOCCURSANDWHYCANNOTBEREADILYADDRESSEDWITHINTHECOMPETITIVEFRAMEWORKASARGUEDBYKRUGMAN1995,THISPROBABLYEXPLAINSWHYSPATIALECONOMICISSUESHAVEBEENFORSOLONGATTHEPERIPHERYOFMAINSTREAMECONOMICSNOTE,INPASSING,THATAMAJORIMPLICATIONOFTHESPATIALIMPOSSIBILITYTHEOREMISTHATSOMEFORMSOFIMPERFECTCOMPETITIONARELIKELYTOBENECESSARYTOHANDLEREGIONALISSUESITISNOSURPRISE,THEREFORE,THATTHESURGEOFNEGTOOKPLACEA

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