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Packers and Movers Pune

Than the level of the cost surface for small firms will be higher than the revenue curve everywhere. Therefore small firms cannot escape failure by relocating to another location but must grow in order to remain profitable. Here the firm faces a trade- off between on – site expansion intra- site growth relocation to another- larger- site or setting up one or more new growth. This and distinction is similar to Krumme’s 1969a division in three types of spatial adjustments.

 If the firm chooses to relocate, it is not driven by the traditional location factors, but by the need to adjust to internal dynamics. Many empirical studies point to the need for expansion as the most important trigger of firm relocation see e.g. Louw 1996 Pellenbarg 1987, 1995. It is also packers possible that economies of scale can only be realized at particular locations for instance urban areas with a large market where at other locations rural areas this is not possible.

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Packers and movers pune

The spatial adjustment process to firm growth in relation to the external environment is one of the key explanatory factors of firm relocation which may be explained by the internal dynamics of the firm a process that also fits in a neo- classical framework. Nevertheless it has not received much attention in neo- classical location theory, with its focus on external location pull factors.

The spatial dimension has got renewed interest in mainstream economics since the beginning of the nineties due to the work Krugam c.s on what is labeled as the New economic geography see for instance Krugman 1995; Fujuta et al. 1999. According to Neary 2001 p.536: The key contribution of the new economic geography is a framework in which standard building blocks of mainstream economics especially rational decision making and simple general equilibrium models are used to model the trade between dispersal and centripetal forces.

Although mobility of economic activities is a crucial adjustment mechanism in these models to explain agglomeration packers Neary 2001, movers p.549-550 argues that the model has packing almost nothing to say about individual a firms. Except for the fact B that it incorporates increasing returns the new economic geography has industrial organization underpinnings which are very fast rudimentary. In the particular the assumption of free entry- B perfectly elastic supply of firms at all locations- allows almost no role for strategic interactions between firms. As a result while cost are fixed they are never sunk so firms industries and even cities are always free to move.