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Difficulty: MediumLocation and Localization of Industries

Which of the following scenarios best illustrates the concept of localization of industries, as distinct from the location of a single firm?

  1. The concentration of several independent leather-tanning firms within a specific region in Kano to benefit from shared infrastructure and a specialized labor pool.Answer
  2. B
    A single cement manufacturing firm siting its processing plant near limestone deposits in Ogun State to minimize raw material transport costs.
  3. C
    An individual cassava processing company choosing a site adjacent to a major highway in Oyo State for easy distribution to retail markets.
  4. D
    A commercial bakery establishing its operations in a densely populated suburb of Lagos to be close to final consumers.

Answer

The concentration of several independent leather-tanning firms within a specific region in Kano to benefit from shared infrastructure and a specialized labor pool.
Localization of industry occurs when several firms in the same trade or manufacturing sector concentrate in a specific geographical area. The gathering of multiple leather-tanning enterprises in Kano to share specialized labor and infrastructure perfectly exemplifies localization and the resulting external economies of scale.

Step-by-Step Solution

1
Define location of an industry versus localization of industry.
Location refers to the selection of a specific site for an individual firm based on factors like raw materials or market. Localization (agglomeration) refers to the concentration of many firms belonging to the same industry in a particular area.
Establishing this distinction is essential to identifying which option represents multi-firm concentration rather than single-firm siting.
2
Evaluate the scenarios against the definition of localization.
The scenario describing multiple leather-tanning firms clustering together in Kano shows industrial localization, as it involves an entire industry gathering in one area to access localized economies of scale.
All other choices describe decisions made by a single individual firm seeking raw materials, power, or proximity to market.

Key Concept

Localization of Industries vs. Location of an Industry
Estimated Time:1m 0s
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Topics

Location and Localization of Industries

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