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concentration and centralization

  The tendency towards localization of economic activity in and around a relatively small number of urban centres. This condition is also referred to as polarization or agglomeration. It arises from the spatial concentration of the market, sources of information, bases for control and decision making, interactivity linkages and other external economies. Concentration and centralization increase the disadvantages of peripheral locations and contribute to the economic and social deprivation commonly found with greater distance from the core (see core-periphery model).

Spatial concentration and centralization are associated with the tendency for economic activity to be organized in units of increasing size and within a hierarchical organizational structure. The growing concentration of ownership of capitalist business activity was evident during the nineteenth century, decades before the contemporary emergence of the multinational or transnational corporation. The large capitalist corporation of today may have productive capacity and sales outlets in many different nations, but ownership and control remain vested in the headquarters that are usually located within one of the major financial centres of Europe or North America. Concentration of capital in a non-spatial sense, i.e. in the hands of fewer larger owners, is an important feature of advanced capitalism and a source of concentration of political, as well as economic, power which transcends that of nation-states. The associated geographical concentration of certain kinds of economic activity facilitates the flow of capital between different uses and the pace of circulation and turnover on which profits depend. (DMS)



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Other Terms : spatial structure | information asymmetries | multiple nuclei model
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