Regional Economics

The role of regional economics in business.

By definition regional economics is represented as a subject concerned with understanding and explaining the geographic configuration of the economy, particularly regarding industrial location, regional development, urbanization, migration, land use, etc. To my mind, regional economics significantly impacts business.

The point is that the objectives of regional economics are closely assoisiated with regional management, as they deal with common issues.

The major tasks of regional management are economic and social developement of an economy of the region, optimization of financial streams, formation of conditions and mechanisms of strengthening the economic base of the region and formation and realization of structural, investment and scientific and technical policy in the region, creation and development of market infrastructure. All these features are closely connected with the performance of a business in a current region.

The second argument for the direct relationship between regional economics and businesses is, for example, the question of location of the plant. When the company decides where to place the plant, it should take into account a lot of factors. Firstly, the firm aims at minimal costs of transportation and labour. According to A. Weber before locating the industry, the company should analyze material index, labor and aglomeration in the region. If the company estimates its risks and opportunities in a region adequately it can avoid undesired consequences and guarantee the success and well-being of the company.

As an example I can overview the region of Sofia (which can be viewed as a region of the European Union). A lot of huge companies like «Hewlett Packard», «Reuters», «Boeing», «Siemens», «IBM», «Erics­son» and«Ford Motor Co» are operating there successfully. They chose