New Economic Geography

New Economic Geography (NEG) is a theory that examines how economic factors influence the spatial distribution of industries and people. It emphasizes the importance of size, proximity, and agglomeration—where businesses and people cluster together in specific areas. This clustering can create economic advantages, such as reduced transportation costs, a larger labor pool, and increased collaboration. NEG helps explain why cities and certain regions thrive while others struggle, looking at how globalization, trade, and regional policies shape economic landscapes. Ultimately, it highlights the interaction between geography and economic activities.