The Spatiality of External Economies (Externalities)

Abstract

In our days externalities or external economies with other words became a frequently used expression both in the works of regional and urban economy and in the regional and urban development documents. External economies have central function in both Paul Krugman's "New Economic Geography" and Michael Porter's cluster based regional development strategy theory. Significant part of the regional programmes practically tries to encourage the establishment of positive externalities or strives to moderate the effects of negative externalities. Extemalities as economic effects beyond the traditional market transactions mean one of the most important research fields of economics for long time especially in the questions relate to efficiency of resource allocation.

In our study we deal with some basic questions of the spatiality of the external economies. At first, based on the literature – with touch upon local characteristics – we make the forma- tion, the interpretation and the application of the expression known. Next we review the main features of the urban externalities between different market players, basic questions of their examination and modelling and their effects on urban land use.