CONCEPTS ON AGGLOMERATION ECONOMIES

ECONOMIES OF AGGLOMERATION :

The term agglomeration is an economic term used to refer to the phenomenon of firms being located close to one another

The location  which provide markets and also provide services such as banking, insurance, transport, consultants and financial advice, become urban center called as economies of agglomeration.

The basic advantage of agglomeration is cost reduction that a firms obtain by locating in proximity to each other. 

FOR EXAMPLE : 

                            Chinese clothing manufacturers :  China has seen a strong growth in                                  manufacturing industries on the south-east coast. These areas have                                    good transport links for exporting to the rest of the world. Also, the                                    areas have attracted migrant flows from northern China, enabling                                        wage costs to remain low.