The Location Theory

Location theory is a branch of economic geography that studies how and why businesses and people choose specific locations for their activities. It examines factors like proximity to markets, resources, transportation, and labor supply to understand how location impacts costs, profits, and efficiency. Essentially, it helps explain where businesses are likely to set up shop and how geographic factors influence economic decisions. This understanding guides urban planning, business strategies, and regional development by identifying optimal locations that maximize benefits and minimize costs.