ADVANCES IN COMMERCIAL GEOGRAPHY

3
Índice
Advances in
Commercial
Geography
Prospects, Methods
and Applications

4 Índice
El Colegio Mexiquense, A.C.
José Alejandro Vargas Castro
President
José Antonio Álvarez Lobato
General Secretary
Henio Millán Valenzuela
Research Coordinator

5
Índice
Advances in
Commercial
Geography
Prospects, Methods
and Applications
Carlos Garrocho
Editor

6 Índice
Translation and proofreading: Carlos Félix Garrocho Rangel
Edition: Ansberto Horacio Contreras Colín
Desing and layout: Luis Alberto Martínez López
First edition: 2013
D.R. © El Colegio Mexiquense, A.C.
Ex hacienda Santa Cruz de los Patos s/n,
Col. Cerro del Murciélago,
Zinacantepec 51350, México, MÉXICO
Ventas: <ventas@cmq.edu.mx>
Página-e: http://www.cmq.edu.mx
Queda prohibida la reproducción parcial o total del contenido de la presente obra sin
contar previamente con la autorización expresa y por escrito del titular del derecho patri-
monial, en términos de la Ley Federal de Derechos de Autor, y en su caso de los tratados
internacionales aplicables. La persona que infrinja esta disposición se hará acreedora a las
sanciones legales correspondientes.
Printed and made in Mexico/ Impreso y hecho en México
ISBN: 978-607-7761-49-5
330.9
A2444
Advances in commercial geography: prospects, methods and
applications / Editor Carlos Garrocho Rangel .-- Zinacante-
pec, Estado de México: El Colegio Mexiquense, a.c., 2013.
270 p.: il., gráf., tables
It includes bibliographical references
ISBN: 978-607-7761-49-5
1. Commercial geography. 2. Economic geography. 3. Urban
economy - Case studies I. Garrocho Rangel Carlos, Editor.

7
Índice
Contents
Introduction 9
Carlos Garrocho
Part I: Radar Views
Commercial and Economic Geography: Past and Future 43
Brian J.L. Berry
Towards a Policy Engaged Retail Geography 59
Neil Wrigley
What is an Urban Structure? The Challenge
of Foreseeing 21st Century Spatial Patterns of
the Urban Economy 95
Richard Shearmur
From SpaceStat to Cybergis: Twenty Years
of Spatial Data Analysis Software 143
Luc Anselin
Part II: Case Studies
The Evolution of Commercial Structure in
the North American City: A Toronto Case Study 175
Jim Simmons

8 Índice
Spatial Organization of Banking Branches in
the Intra-Metropolitan Space in Toluca, Mexico 207
Carlos Garrocho y José Antonio Álvarez-Lobato
Microspatial Analysis of Tertiary Activities in
the Traditional Business Center of a Big
Mexican City 239
Zochilt Flores, Carlos Garrocho, Tania Chávez
y José Antonio Álvarez-Lobato

9
Introduction
Introduction
CommerCial geography is a subfield of human geography, as are urban geog-
raphy and economic geography, with which commercial geography has strong
relationships (see chapter 1 in this book by Brian Berry). Some definitions could
clarify what commercial geography is. According to Johnston et al. (1991),
urban geography is particularly “concentrated on the patterns of urban settle-
ments in a country or large region, thereby treating towns and cities as a-di-
mensional points on a map” and/or “focused to explain patterns within urban
areas, thus treating them as areas rather than as points” (1991: 510). Economic
geography, on the other hand, is focused on understanding “the production and
use of environmental and technological conditions of existence” (1991: 117)
and “the spatial dimensions of the productive aspects of economic activity”
(p.118). O´Sullivan (2007: 1) defines urban economics as “the intersection of
geography and economics…puts economics and geography together, exploring
the geographical or location choices of utility-maximizing households and
profit-maximizing firms…and examines alternative public policies to promote
efficient choices.” This is the background to understand what commercial ge-
ography is.
Regarding commercial geography, Landini (1977: 25) points out: “The
wholesale market is the place where demand and supply can compare them-
selves, with a perspective conditioned by balancing function: from the location
that does or does not favor the meeting; from the infrastructures that determine
Carlos Garrocho

10 Advances in Commercial Geography: Prospects, Methods and Applications
their level of accessibility and their area of influence; from the equipment that
qualifies the power and the specialization; from the density and buying possibil-
ity of the people whose socio-professional status and distribution on the urban
and extra-urban territory must be studied; last from the influx of information
to the way the operators intervene…the geographer must go beyond that, he
must examine both the causes of inefficiency and the perspective in order to
re-organize the sector.” (The issue of commercial policy is also pointed by Bul-
lado, 2002, and by Wrigley in chapter 2 of this book) (Scorrano, 2005: 271).
Landini (1981: 11-12) also stresses the role of the two geographical scales of
urban geography (cities as a-dimensional points and as areas): “The geograph-
ic research to the problem of the commercial tertiary must regard two funda-
mental aspects: the analysis of the inner composition of the sector and of the
major or minor standard and efficacy by which it covers and serves the terri-
tory…and to individuate the regional setting and the distribution of demand
‘weight’ among the different centers, according to the importance of their
tertiary equipment and according to the amount of the commercial services to
the eventual changes that the planning should make on the city network in
order to create a hierarchical urban framework” (Landini, 1981: 11; Scorrano,
2005: 270). Clearly these commercial geography objectives also relate directly
to the object of study of the urban economy, which is “to explore the geo-
graphical or location choices of utility-maximizing households and profit-
maximizing firms…and the alternative public policies to promote efficient
choices” (O´Sullivan, 2007: 1).
In short, commercial geography is at the center of the intersection of urban
geography, economic geography, and urban economics, sharing their goals and
much of their methods, but specifically targeting tertiary activities.
Objectives and pivotal axis of the book
This book aims to present a profile of the research done around the world in
the field of commercial geography and to locate in this context the research
done in Mexico, particularly that which is done in El Colegio Mexiquense, one
of the research centers that has explored these issues with particular interest in
Mexican cities.El Colegio Mexiquense is a research center in social sciences that
is located in the Toluca Metropolitan Zone (1.7 million people), half an hour
from Mexico City (Fig. 1).

11
Introduction
The underlying theme in all chapters is to advance on the explanation of
the spatial organization of tertiary activities in the intra-urban space and its
social consequences in a range of geographical scales, from the large metro-
politan areas to the micro intra-metropolitan spaces (i.e., micropolitan spaces)
as the traditional business center (tbC). This is the first axis of the book. It ar-
ticulates the positions of Brian Berry (chapter 1), who discusses the past and
future of commercial geography; Neil Wrigley (chapter 2), who proposes a
commercial geography highly related to public policy; Richard Shearmur (chap-
ter 3), who places commercial geography in the context of urban structures;
Luc Anselin (chapter 4), who links commercial geography with advances in
spatial analysis (including statistics and spatial econometrics); and three case
studies, one of Toronto by Jim Simmons (chapter 5) and the other two focusing
on the Toluca Metropolitan Zone, by Carlos Garrocho, José Antonio Álvarez,
Zochilt Flores, and Tania Chávez (chapters 6 and 7). Each chapter contributes
to the explanation of the location of the consumer-oriented tertiary activities in
the intra-urban space. This book does not attempt to synthesize the diverse
findings into a single approach. The inability to integrate as many study results
has been reviewed by Rudner et al. (2002).
Fig. 1. Toluca Metropolitan Zone.

A second articulator axis of the topics explored in the book is the agglom-
eration (or dispersion) of tertiary activities in urban areas. Except for the Berry
and Wrigley collaborations, which focus largely on exploring the future of com-
mercial geography, the other authors are mindful of the agglomeration (disper-
sion) of private tertiary activities (i.e., commercial clusters) within cities. There
are many schools of thought regarding the cluster of firms cities. There seems
to be consensus, however, that a cluster is the co-location of independent
economic entities that are related in some way, but that are not bound by a
single owner or a specific administration (Maskell and Lorenzen, 2004: 991;
Keeble and Nachum, 2001: 30). This axis is fully justified because, despite the
many efforts reported in the literature, there is no theoretical-conceptual finished
interpretation that accounts for the factors that give rise to agglomerations of
private firms and commercial services in the intra-urban space, the mechanisms
through which they develop, the wedges of their change and transformation,
and their number, specialization and hierarchy.1
The issue of the formation and dynamics of clusters of manufacturing firms
and service-oriented production has been widely discussed in the literature.2
However, the issue of spatial organization of tertiary firms within the city has
received, in comparative terms, much less attention (Gong and Wheeler, 2002;
Keeble and Nachum, 2001; Wu, 2000), perhaps because of the lack of disag-
gregated economics for intra-urban spaces.3
This probably explains the remark-
ably scarce research and knowledge about the spatial organization of tertiary
firms in Mexican cities.
1
This also applies to the case of manufacturing firms at a regional level, the field where there is
more literature on clusters. Even in this body of literature, approaches on clusters of manufacturing
firms are often ambiguous and not very formalized (Vázquez, 2006). They are also so varied as to
have generated some confusion (Gordon and McCann, 2000).
2
For clusters of manufacturing firms (at regional and national scales), Krugman (1992), Porter
(1998a, 1998b), and Fujita et al. (2001) are perhaps the most basic recent references. However, the
main theoretical background on the subject comes from the early twentieth century: Marshall (1890),
Weber (1909), Hotelling (1929), and Schumpeter (1934) are fundamental classical references. In the
case of the spatial organization of production-oriented services at regional level, considering the city
as a dimensionless point, one of the most important references is Daniels (1985).
3
It should be underlined that the classic works of Burgess (1925), Berry (1963), Haig (1926),
Reilly (1931), Ratcliff (1939), and especially those of Berry and Garrison (1958a, 1958b) were the first
to apply the principles of Central Place Theory to explore the spatial organization of tertiary firms
within cities. Then, in 1988, Berry coordinated a book that shows contributions by Parr, Ghosh, and
others, expanding their original reasoning from the 1950s. The idea of a hierarchy of clusters has its
roots in Central Place Theory (Christaller, 1966).

13
Introduction
The available evidence shows that tertiary firms tend to co-locate both at
regional and intra-urban scales, and contemporary research tries to understand
why these agglomerations (commercial clusters) occur (Brenner, 2000, 2004;
Britton, 2003; Hutton, 2004; Maillat and Kebir, 1999, Porter, 1990; Shearmur
and Coffey, 2002a, 2002b). The traditional idea that the clusters are necessar-
ily composed of firms that maintain customer-supplier relationships is no longer
in force, and even less for the tertiary sector (Maskell and Lorenz, 2004; Simmie,
1998; Suarez-Villa and Walrod, 1997). Currently other factors are mainly con-
sidered. These factors include proximity to labor markets, access to customers
and suppliers, reducing search costs of consumers, monitoring by competitors,
transmission of tacit and non-standardized information, availability of infra-
structure, and land use planning, among many more. Thus, commercial geog-
raphy uses the cluster term to refer to tertiary agglomerated firms (i.e., co-lo-
cated) in the territory (Shearmur, 2007).4
In the end, this book offers some elements that help to better explain the
spatial organization of tertiary activities within the city. On the one hand, it
provides an abstract vocabulary that allows a more transparent representation
of the spatial organization of tertiary firms in the intra-urban space, assuming
that no perfect vocabulary exist for the re-description of reality, that the integra-
tion is an ongoing task and unfinished by nature, and that the abstract vo-
cabulary will never achieve a perfect representation of the real (Barnes, 2001).
On the other hand, the book offers a variety of methodological resources (even
some of the last generation; see especially chapter 4) that allow to put into
practice the abstract conceptual vocabulary on the spatial organization of
tertiary activities within urban spaces.
Exposure Strategy
The book is divided into two parts and follows a deductive exposition strategy,
which goes from the general to the particular. The first part (“Radar views”)
4
It is worth mentioning that the analysis of the tertiary agglomeration of firms allows multidis-
ciplinary approaches (Daniels, 1985). The idea is to identify key concepts and theoretical relationships
that explain the agglomeration or dispersion of firms in the territory (i.e., spatial patterns) to have a
deeper understanding of business clusters in specific situations and interurban spaces. A broader
argument about this can be seen in Benneworth and Henry (2004). Although the vast majority of
authors in this book are geographers, each has a very different specialization in the broad field of
geography.

includes broad spectrum contributions to commercial geography. The first chap-
ter, by Brian Berry, focuses on analyzing the historical trajectory of commercial
geography and explores its possible conceptual and methodological developments
in the coming years. The second chapter, by Neil Wrigley, argues the imperative
of linking commercial geography to the design of public policies. These are the
two more general chapters of the book. The book then starts to focus on increas-
ingly specific topics. Chapter 3, by Richard Shearmur, focuses on the urban
context of commercial geography, i.e., the urban structures. Chapter 4, by Luc
Anselin, closes the first part of the book by exploring various borderline method-
ological issues that are key to the analysis of commercial geography.
The second part of the book (“Case Studies”) is much more specific. It has
three chapters: one on the evolution of the commercial structure of Toronto,
by Jim Simmons, and two on the spatial organization of tertiary activities in the
Toluca Metropolitan Area, where El Colegio Mexiquense is located: the spatial
organization of banking branches in the intra-metropolitan space, by Carlos
Garrocho and José Antonio Álvarez, and a microspatial analysis of tertiary ac-
tivities in the traditional business center, by Zochilt Flores, Carlos Garrocho, and
Tania Chávez, and José Antonio Álvarez. This sequence made it possible for the
book to achieve its goal of presenting a profile of the research carried out by
international leaders in the field of commercial geography and to place in this
context the research done in El Colegio Mexiquense.
This introduction presents the context in which this book was generated. It
highlights the main contributions of each of the contributions. The context of
the book is told in a deliberately personalized style. The reader can then under-
stand the conditions in which the book was originated and the path followed
by a research center and a specific research team from the beginning origins
to the current stage in which it produces a book with world-leading authors
and publications in some top international journals. The intention is for readers
to learn from the successes and mistakes of the research team in commercial
geography at El Colegio Mexiquense. The analysis of each chapter is intended
to facilitate the reading of the book, generate curiosity in the reader, produce
questions, and highlight the contributions of each chapter.

15
Introduction
Context of the Book
The interest of El Colegio Mexiquense in economic and commercial geography
dates back almost to its foundation (1986), with the publication of Graizbord
and Garrocho’s (1987) Sistemas de ciudades: fundamentos teóricos y operati-
vos (Systems of cities: theoretical and operational fundaments), which used a
1964 article, “Cities as Systems within Systems of Cities” by one of history’s
most distinguished geographers, Brian Berry, as a key reference.
In this article, Berry addresses the urgent need for solid theories regarding
the city, which could be created and reinforced with the availability of more
and improved information and the surprising progress burgeoning in informa-
tion technology. For Berry, testing and creating theories about the city was and
is the most significant dimension of urban studies (Berry, 2011). This powerful
message is still absent in Mexico, where we have preferred to adopt, and in the
infrequent and best of cases, to adapt theories created in other realities (as
diverse and different from our cities as Los Angeles and Chicago, just to mention
two examples) to the Mexican context.
One of the most important lines of research inspired by Berry’s work was
that of the constant flux between the macro scale (i.e., regional, city systems)
and the micro scale (the intra-urban space: the tbC or the periphery, for ex-
ample). In other words, such research concerns the constant state between
perceiving the city as an a-dimensional point (the regional perspective) and as
an area (the intra-urban perspective). Berry’s studies relating these two scales
are numerous and innovative, and still astonish us.
Berry’s geographical perspective has strongly influenced his numerous
students, more than a hundred of whom he has served as doctoral thesis advi-
sor. One of his most outstanding students in the University of Chicago, Jim
Simmons, published Urban Canada in 1969. This work was fundamental for
Graizbord and Garrocho’s Sistemas de ciudades: fundamentos teóricos y ope-
rativos.5
Simmons’ work summarizes, in only 165 pages, different theoretical
and conceptual elements of city systems research and presents an impressive
array of vanguard analytic methods at that time. The large majority of these
methods were completely unknown in Mexico even in the 1980s and required
in-depth study in order to apply them in the researching of Mexican cities.
5
Jim Simmons published Urban Canada with his brother Robert, who, as a literature student,
was only in charge of editing. In the end, Robert was named as co-author, which showed Jim Sim-
mons’ enormous academic and personal generosity.

In 1988 Boris Graizbord concluded his sabbatical year at El Colegio Mex-
iquense, and in 1989 I left for the University of Exeter (England) to begin my
doctoral studies with a project thesis on socio-spatial planning of public health
service. This project utilized and applied the main arguments of the city systems
perspective.6
While researching point public services planning, such as health services, I
encountered the private service planning literature, that is to say, the eco-
nomic and commercial geography literature that I was unacquainted with in
Mexico in that pre-Internet time.7
I recall numerous books on the subject. One
in particular, however, caught my attention because of its intelligence, clarity,
enjoyable prose, diligent nature, and graphic support. This was Location, loca-
tion, location (1987) by Ken Jones and Jim Simmons. The book was such a
success in Canada that it was later slightly modified and, in 1990, distributed
in the United States, Great Britain, and Australia as The Retail Environment.
Because of its level of excellence it continues to be a basic text book of almost
every commercial geography course in the world.8
The Retail Environment, in addition to other works I reviewed for my doc-
toral thesis, encouraged me to write a small locational analysis manual while
at Exeter: Localización de servicios en la planeación urbana y regional (Location
of Services in Urban and Regional Planning), which was published in 1992.
Oddly enough, this manual was sold out in a very short time. This evidenced
the interest of Mexican geographers in locational analysis techniques.
When I returned to El Colegio Mexiquense from my doctoral studies, I
prepared my thesis for book publication. The result was Análisis socioespacial
de los servicios de salud: accesibilidad, utilización y calidad (Sociospatial Analysis
of Health Services: Accessibility, Utilization and Quality; Garrocho, 1995). Math-
ematical models of spatial interaction and localization-assignation were added
to the city systems’ theoretical and operative elements, thus contributing to the
locational planning of public and private services in El Colegio Mexiquense.
This book was the starting point for the organization in 1994 of an interna-
tional seminar on metropolitan systems, where I had the opportunity to invite
6
Boris Graizbord is today a member of the Governing Board of El Colegio Mexiquense, the
Colegios’ highest authority.
7
Point services are those located in one place in space, unlike other services such as electricity
or water that are found in a grid.
8
An Internet search of the book’s title will lead to numerous references to study programs
stretching from North America to the Far East that include it in their basic bibliography.

17
Introduction
Jim Simmons (among other world-renowned researchers, such as David M. Smith,
Harry Richardson, and Michel Batty), and thus confirm Simmons’ academic bril-
liance and discover his great integrity. Simmons published, with Wendy Evans,
Commercial opportunities in Mexico City that same year. This was one of the first
modern studies on the commercial geography of Mexico City and evidenced the
great research opportunities in Mexican cities in this field.
At El Colegio Mexiquense, we continued to explore different topics of com-
mercial geography in the subsequent years. By then, we had formed a research
group with the active participation of Tania Chávez and José Antonio Álvarez.
We began to work on joint publications that added geographic information
systems (gis) to the theory and mathematical models. In 2002, we jointly pub-
lished La Dimensión espacial de la competencia commercial (The Spatial Dimen-
sion of Business Competition), in which we presented a software program that
created different spatial interaction models in a gis environment. The software
was used for different locational hypermarket analysis in the Toluca metropolitan
area. The multiple exercises and simulations conducted to put this book to-
gether allowed me to publish, in 2003, “La teoría de interacción espacial como
síntesis de las teorías de localización de actividades comerciales y de servicios”
(“Spatial Interaction Theory as a Synthesis of the Theories of Localization of
Commercial and Service Activities”), one of the ten most referenced articles of
Economía, Sociedad y Territorio, the first academic journal published by El Cole-
gio Mexiquense, which ratified me the Mexican and Latin American interest in
economic and commercial geography.
In 2005 Juan Campos Alanís joined the research team. He is a specialist in,
among other areas, GIScience and has an academic background in the Geography
Faculty of the University of the Sate of México. His joining the research team allowed
us to incorporate the thesis work of numerous undergraduates and graduate
students to our economic and commercial geography projects, and publish differ-
ent papers on public and private service localization and accessibility.
It was during this period that we discovered Neil Wrigley’s work. We first found
Reading Retail: A Geographical Perspective on Retailing and Consumption Spaces
(Wrigley and Lowe, 2002a) and then, in a retrospective search review, Retailing,
Consumption and Capital: Towards the New Retail Geography (1996).
Wrigley’s perspective was not only original but also lucid, although perhaps
too profoundly theoretical for our predominantly applied research. So we breathed
a sigh of relief when we read his articles “Food deserts’ in British cities: policy
context and research priorities” (2002) and “Deprivation, diet, and food-retail

access: findings from the Leeds ‘food deserts’ Study” (2003), which were closer
to the research we were conducting in El Colegio Mexiquense.
The idea of food deserts (city areas that lack suitable access to food supply
points, mainly supermarkets and hypermarkets) gave us a new vision of the city.
We thought we should modify our scale and, instead of conceiving commercial
units as isolated firms, consider their forms of spatial organization, both their
traditional forms (such as those in the tbC) and their contemporary forms. The
latter forms are clearly visible in the more recent sections of the modern city:
commercial corridors, shopping malls, power centers (i.e., planned concentra-
tions of big box stores), and power nodes (i.e., unplanned concentrations of
big box stores plus, at least, a shopping mall), which lead to a whole typology
of elements that make up the commercial structure of the city (Hernandez and
Simmons, 2006).9
Berry’s work (again the necessary and refreshing return to Berry) from 1963,
Commercial Structure and Commercial Blight, and from 1967, Geography of
Market Centers and Retail Distribution, were essential for studying intra-urban
commercial structure. Nevertheless, the commercial landscape had changed
significantly since the 1960s, so the work of Simmons and Kamikihara, The
Commercial Structure of Canadian Cities (2003) and Location strategies in
Quebec (2007), as well as that of Hernández and Simmons, “Evolving Retail
Landscapes: Power Retail in Canada” (2006), all published by the Centre for the
Study of Commercial Activity of Ryerson University, allowed us to begin to make
sense of the Toluca metropolitan area’s commercial structure.10
However, we found it complicated to continue this line of research without
information on the economic-spatial structure of the metropolitan area. In this
broad and turbulent area of research, we discovered a light that pointed us
along the path we needed: the excellent work by Richard Shearmur, especially
“The Clustering and Spatial Distribution of Economic Activities in Eight Cana-
dian Cities” (2007) and “Urban Hierarchy or Local Buzz? High-Order Producer
Service and (or) Knowledge-Intensive Business Service Location in Canada,
1991-2001” (2008). These works gave us an important basis to define Toluca’s
metropolitan structure (Garrocho and Campos, 2007, 2009) and to analyze
some of its main elements (Garrocho and Flores, 2009).
9
For a more precise definition see the chapter by Jim Simmons in this book.
10
The Centre for the Study of Commercial Activity of the University of Ryerson (Canada) is one
of the most prestigious in the world in tertiary retail research.

19
Introduction
With this more comprehensive vision of the city, it was then possible to explore
the spatial structure of some concrete activities, such as pharmacies (Garrocho
and Campos, 2011a) and bank branches (Garrocho and Campos, 2011b), using
quite simple but powerful, spatial analysis techniques.11
We learned many things,
mainly our need for more precise and robust spatial statistic techniques. We again
had to turn to the best literature. We found authors we were unacquainted with,
among which was the towering figure of Luc Anselin.
Luc Anselin is one of the world leaders in the field of spatial econometrics
and spatial analysis. His work is astonishing... and complex. However, his gen-
erosity is greater. He has developed very specialized software that he distributes
to everyone for free through the Internet. Noteworthy, of course, is his software
OpenGeoda, used by close to 80,000 researchers worldwide. The works compiled
by Anselin et al. (2010) in their book Perspectives on Spatial Data Analysis
showed us how much we did not know. Although this work was overwhelming,
it helped us to create a long-term working plan. Fundamental for these tasks
were Professor Anselin’s works Spatial Data Analysis with gis: An Introduction
to Application in the Social Sciences (1992) and “Local indicators of spatial
association” (1995), among many others, that today we continue to discover,
rediscover, and study.
Our planned route led us to study exploratory techniques of point patterns.
We began with the planar K function and then went on to experiment with
space-network K function. The support of researchers from other latitudes was
essential during this phase. Adrian Baddeley and Rolf Turner helped us from
Perth (Australia) and New Brunswick (Canada) respectively, and professor Okabe
and his team from Tokyo (Japan). Among other texts, “Spatstat: an R package
for analyzing spatial point patterns” by Baddeley and Turner (2005), and SANET:
A Toolbox for Spatial Analysis on a Network, Version 3.3 by Okabe et al. (2007)
were fundamental. Without their help we would never have been able to pub-
lish “Calculating Intra-urban agglomeration of economic units with planar and
network K-functions” (Garrocho, Álvarez, and Chávez, 2013).
In 2011, with the groundwork of this earlier experience, we proposed a four-
year project to the National Council of Science and Technology (Conacyt) to study
the spatial behavior of tertiary firms in the intra-urban space of Mexico’s large
11
It is essential to thank Professor Dennis Lord for his support. He is Professor Emeritus of the
Geography Department of the University of North Carolina in Charlotte (usa) and co-author of the
1981 classic “Competition and Location Strategy in Branch Banking: Spatial Avoidance or Clustering,”
Urban Geography, Vol. 2, No. 3, pp. 189-200.

cities (those with more than a million inhabitants). We wanted to test the available
geo-economic theory and, if it be the case, begin to generate theoretical elements
for the Mexican metropolis, just as Brian Berry had recommended in the United
States since the 1960s (Berry, 1963: of course, the permanent and necessary
return to Berry’s work). The project was approved, and the first funds were as-
signed in September 2012. The project will conclude in 2016.
This academic context coincided with the 25th
anniversary of El Colegio
Mexiquense. As part of the celebration we organized the international seminar
“Cities, Globalization and Development.” To our surprise, we were able to
gather Brian Berry, Neil Wrigley, Jim Simmons, Richard Shearmur, and Luc
Anselin to the economic and commercial geography sessions. They all agreed
to provide original texts for this book. The members of the El Colegio Mexi-
quense research team completed the line-up.
Looking Towards the Future
Because of its theoretical and technical complexity, the El Colegio Mexiquense
project authorized by Conacyt in 2011 requires the support of first-class inter-
national experts. The international seminar helped us to enlist Richard Shearmur
as the project’s international consultant. Luc Anselin, currently director of the
GeoDa Center for Geospatial Analysis and Computation of the University of
Arizona, offered us his support and that of his team.
We initially discussed the project’s methodology with Richard Shearmur and
Luc Anselin, separately, during the seminar. Interestingly, both agreed on the
general strategy. In February 2013 we detailed the project methodology with
Richard Shearmur. Work is ongoing. Thus, members of the commercial and
economic geography research team of El Colegio Mexiquense will be busy at
least until 2017 explaining the spatial behavior of tertiary firms in the intra-
urban space of Mexico’s largest cities.
Content
This book puts together original texts written by authors specialized in eco-
nomic and commercial geography, especially participants in the international
seminar “Cities, Globalization and Development.” For the first time, Berry, Wrig-

21
Introduction
ley, Simmons, Anselin, and Shearmur, all international leaders in their scientific
fields, appear together in a publication. The interrelated texts of very high aca-
demic quality found in this book will surely be of use to those interested in the
spatial dimension of the tertiary economy on the intra-metropolitan scale.
The texts are divided into two main sections. The first presents wide spec-
trum (Radar View) perspectives of economic and commercial geography, with
works by Berry, Wrigley, Shearmur, and Anselin. The second focuses on case
studies with texts by Simmons, Garrocho and Álvarez, and Flores, Garrocho,
Álvarez and Chávez. This book is organized with a deductive perspective that
goes from general themes to particular topics.
Part I: Wide Spectrum Studies
Economic and Commercial Geography
and its Ties to Each Generation’s Personality
The book opens with a chapter by Brian Berry, who ensnares us not only with
the clarity of his analysis of the evolution of Anglo-Saxon commercial geography,
of which he is one of the main architects, but also with the elegance of his
reasoning. Berry ties the evolution of the discipline to the generational charac-
teristics, ideology, values, and aspirations of the usa population during the 20th
century: the Traditional Generation (those born before 1945, to which Berry
belongs), the Baby Boomer generation (1945-1964, to which this book’s coor-
dinator belongs), Generation X (1965-1980, to which, for example, the col-
laborators Álvarez and Flores, belong), and the Millennium Generation or
Generation Y, which covers those born after 1980 (the generation of many of
the current doctoral geography students in Mexico and around the world).
Although Berry recognizes the difficulty of exploring the evolutionary tendencies
of economic and commercial geography, he thinks that these will be directly linked
to the personality profile of Generation Y, since this is the generation of the future
geographers. In other words, the way of being and thinking of Generation Y will
create the new paradigms of economic and commercial geography.
Surveys in the United States show that Generation Y is the generation of
connectivity, digital technology, social networks, instant communication, envi-
ronmental protection, diversity (racial, ethnic, religious, sexual, and lifestyle),
vanguard education, fear of terrorism, aversion to authority and rigid working

environments, and the belief that the government should play a more active
role in the solution of collective problems.
Using these features of the Generation Y personality, Berry identifies differ-
ent implications for economic and commercial geography in the next decades.
He assumes that what he calls the Millennium Geography will be the depositary
of mathematical approximations and the desire to close the distance between
the social sciences and science of matter (physics or chemistry, for example), as
economy has unsuccessfully attempted to do for some time and the new eco-
nomic geography for some decades.
Berry cautiously anticipates that Generation Y will push for a more human-
istic and qualitative rather than quantitative commercial geography. It will be
quite different in the new economic geography field that, with the support of
new and spectacular databases, will generate the millennium commercial and
economic geography.
Commercial Geography, Theory and Public Policy Design
The second chapter, by Neil Wrigley, analyzes the evolution of commercial
geography, especially in Great Britain, drawing from the author’s wealth of ex-
perience in regional, national, and international projects. Wrigley argues that
commercial geography has been reinvented. It has evolved from a very power-
ful applied discipline with a somewhat weak theoretical base as far as very
powerful discipline in both theory and practice.
For Wrigley, during the 1990s and the beginning of the following decade,
the theoretical contributions to commercial geography, especially those linked to
retail business, repositioned the discipline as one of the most stimulating fields
in the social sciences. The challenge today, he says, is to take advantage of the
opportunities offered to link commercial geography to public policy design.
Wrigley demonstrates that the retail business is one of the most powerful
forces reconfiguring global economy, which explains the strengthening ties
between academic retail business research, large enterprise, and government
at all levels, especially in the United Kingdom.
Nevertheless, Wrigley recognizes the significant challenges linking com-
mercial geography research to public policy design. Firstly, people believe that
they are well acquainted with the retail business sector and are convinced of
certain ideas, promoted in part by the mass media, which are difficult to
modify even if there is convincing evidence that points in new directions.

23
Introduction
Secondly, moving into public policy design from commercial geography
research is frequently like walking into a mine field. Researchers are at permanent
risk of being seduced or co-opted by those who finance their studies, which
can be large companies, governments, international agencies, or commerce
associations. Finally, researchers have to be aware that their findings will always
be viewed with suspicion, because these findings are perceived as being linked
to the interests of the study’s sponsors, or researchers will meet with obstacles
if they encounter any inconvenient findings for business owners.
Nevertheless, for Wrigley, the link between commercial geography and
public policy design is practically inherent to the discipline, given its enormous
influence on domestic and global economy. From his experience as a research-
er and consultant, Wrigley is convinced that governments, international agen-
cies, and large companies are highly receptive to the great capacity of com-
mercial geography to support policy design and public and private strategy.
He has one warning: commercial geography researchers should maintain and
broaden the theoretical platform that has been built in the last three decades,
which is what will allow the discipline to consolidate as an essential study field.
What is Urban Structure?
The spatial organization of tertiary economy depends to a large extent on how the
city functions, i.e., on its urban structure. Strangely enough, however, the term
“urban structure” lacks conceptual clarity. The third chapter of this book, writ-
ten by Richard Shearmur, focuses precisely on the question of defining urban
structure.
By reviewing the literature, Shearmur realizes that there are different per-
spectives of the meaning of urban structure. This prevents concept homogeni-
zation. For example, Axelrod (1956) refers to sociological structures of urban
communities. Harris and Ullman (1956) understand it as the configuration of
land uses. Guiliano (1993) conceives it as the relative localization of housing
and jobs. Anas et al. (1998) study it as the spatial distribution of the city’s
economic activities. Morgan and Pelissero (1980) approach it as the sum of
governmental management. Wong and Zhou (1999) think of it as the geogra-
phy of population densities.
Shearmur sees the idea of urban structure as multidimensional. His analysis
is therefore focused on the spatial structure of the city’s economy, in order to

contrast theory with empirical evidence (it is interesting how Shearmur also
inevitably returns to Berry, 1964).
Richard Shearmur’s central theme is why urban structures change through
time and whether these changes can be even partially anticipated. He begins
by addressing some of the ways in which the term “urban structure” has been
used, and exploring their theoretical implications.
The complications of the urban structure concept lead Shearmur to conclude
that it would be very difficult to define urban (which explains why a conven-
tional and arbitrary definition is usually used), but perhaps more importantly,
that there is no unique structure in the city. Rather, there are multiple interre-
lated urban structures that mutually affect one another (economic, social,
cultural, administrative, and political structures, for example). These structures
are linked to internal processes and agents (for example, land use regulations,
the city’s history, its economic profile, the relative localization on the territory)
and external processes and agents (changes in the global economy, to mention
just one) that can be urban (the localization of certain city activities or infra-
structure, for example) or extra-urban (such as technological change or discon-
tinuities in transportation or data transmission).
Shearmur goes on to review the main generic explanations for the distribu-
tion of the city’s economic activity. He does a comparative analysis of the dif-
ferent urban economic analysis perspectives, and proposes a perception of
urban structures in economic terms. Shearmur uses these two sections to explore
the possibility of anticipating changes in urban structures, which, he claims,
can be very difficult (but perhaps not totally impossible), since the city is an
open complex system.
Shearmur suggests that the possibility of anticipating the evolution of the
intra-metropolitan economic structures lies in the fact that these structures
originate in a few key processes (transportation technology, the city’s historical
footprint called imprint, its economic specialization and its social structures, to
mention a few). The problem is that the results of these processes can be unique
to each city, since cities, he insists, are open complex systems.
Shearmur proposes that “an urban structure is a group of processes and re-
lationships that guide the city’s evolution through time”. Therefore, if the interest
is in the spatial organization of economic activity, then “urban structures are
revealed by observing the geography of the economic activity and identifying the
key processes that guide its evolution”. This idea of the city remains a concept
without defined dimensions, which should find solutions according to each

25
Introduction
context, and it is a given than each definition of city can lead to the revelation
of different urban structures.
He does propose, however, an option: the city can be operatively defined
by identifying the key processes of each case, in such a way as to maximize the
effects of the internal processes and agents (such as those already mentioned:
land use regulations, the city’s history, its economic profile, its localization) and
minimize those from external processes and agents (such as changes in domes-
tic or global economy).
According to Shearmur’s proposal, the first step to studying urban struc-
tures is to isolate specific structures to be studied in the intra-urban space. For
example, to study the structure of economic activities, understood as jobs and
economic units, the structures of interest are those related to the locational
behavior of these actors, their spatial patterns, and their evolution in time,
which constitute essential information to understanding and improving the
city’s spatial, economic, and social planning. Shearmur concludes that it is
possible that the urban structures of different cities coincide in the most gen-
eral features, but that there will inevitably be singularities inherent to open
complex systems.
This conclusion is where Mexico should prioritize the empirical exploration
of the urban city structures, contrast them with existing theories (that are in-
evitably generic and almost all created in realities very different from the
Mexican reality), identify the differences, and propose more suitable generic
explanations for Mexico’s urban reality.
Economic and Commercial Geography
and Spatial Econometrics
Methodology has proven central to the progress of economic and commercial
geography. Spatial econometrics is among the most advanced of the contem-
porary methods. One of the world leaders in this field is Luc Anselin, the author
of the fourth chapter of this book.
Anselin examines the incorporation of software tools into spatial data
analysis and shows that the software platform that supports spatial analysis has
diametrically changed since its beginnings in the last part of the 1980s and the
beginning of the 1990s.
Anselin identifies some key processes that have detonated spatial analysis
software development, as, for example, the constant methodological and

technical advances (that produce increasingly efficient algorithms and powerful
computers that can manage increasingly robust data bases and more complex
analysis), the appearance of the gis (that facilitates storage, management,
calculation, and visualization), the techno-ideological movement of free software
(that freed researchers from working in gis environments designed by large
companies), the arrival of the Internet (whose potential no one foresaw and
that allows huge databases and graphic information to flow, although still with
challenging limitations for research), and the rise of what Anselin calls the cyber
infrastructure (which refers to social and technological solutions that create
efficient networks of research centers and facilitates their exchange of informa-
tion in order to accelerate knowledge creation and application).
Anselin goes on to mention some of his research team’s activities in the
research, development, and application of SpaceStat, GeoDa and PySAL, which
are, perhaps, the most relevant advances in spatial analysis developed by the
GeoDa Center for Geospatial Analysis and Computation, headed by Anselin at
the Arizona State University.
Anselin argues that spatial econometrics and spatial analysis have followed
a path that begins in the most stringent mathematical fields and ends by po-
sitioning itself as a key element of social science research. He is convinced that
developing friendly and accessible software is one of the major contributions
for the advance of certain social science research fields, such as commercial and
economic geography. Many of us are grateful for this and think he is right.
Anselin feels that today, the lack of commercial software is no longer an
impediment for applying spatial analysis methods, especially when there are
various highly efficient free software programs that can easily be connected to
commercial gis. Nevertheless, there are still enormous challenges to broadening
the use of spatial analysis methods, perhaps because analysts always aspire for
more: more data management, more spatial units, more localizations, more
images, more speed.
The first challenge Anselin identifies is the rapid transfer of enormous da-
tabases from high-performance computers (supercomputers) to desktop com-
puters, and then to guarantee the efficient information flow (of numbers and
images) over the Internet. This will require important technological and meth-
odological advances, and is a condition for the daily use of computer programs
that support complex spatial decision-making.
The second challenge Anselin identifies is more related to the social science
research culture than with new technology and statistical methods. In the

27
Introduction
twenty-first century, many research problems are so complex that they need to
be addressed by a group, which implies at least sharing knowledge, data, and
instruments. Achieving this collaborative work between researchers who some-
times are thousands of kilometers apart is a huge cultural challenge, although
it is also technological since it implies standardizing database administration,
techniques, and programs. In other words, it implies building an entire open,
shared cyber-infrastructure.
Finally, Anselin sees the third challenge as related to the formation of spe-
cialists. Building and managing systems that lend support to spatial decision-
making requires a complex mixture of geographic, mathematical, and compu-
tational skills. It is highly probable that there is no educational program in the
world that prepares someone for the task of building spatial decision-making
systems, which complicates the access to and operation in this research field.
Readers will appreciate that this chapter, unintentionally, places Anselin’s
enormous contributions to spatial analysis in the proper perspective, and high-
lights his academic and human generosity by freely allowing everyone to access
the marvelous spatial analysis software created by his team at the GeoDa Cen-
ter for Geospatial Analysis and Computation.
Part II: Case Studies
As mentioned above, Part II involves case studies in which some of the theoretical
elements analyzed in Part I become operative. The chapters of this second section
move forward in empirical analysis and tender bridges to the first section.
The chapters are organized deductively, from the more general to the more
specific. Jim Simmons explores the evolution of the commercial structure of
Canada’s most populated metropolitan area, Greater Toronto. Garrocho and
Álvarez focus on revealing the spatial organization of a particular financial
activity (bank branches) inside Mexico’s fifth most populated urban center
(Toluca metropolitan area). Flores, Garrocho, Álvarez, and Chávez examine the
retail business patterns in the tbC of Toluca metropolitan area.
The Commercial Structure of Greater Toronto
Jim Simmons, with his characteristic precision, examines the evolution in the
past sixty years of Toronto’s commercial structure, revealing three key structures

and reflecting upon the most probable tendencies of its medium-range evolu-
tion. This prospective sense of Simmons’ work reinforces Shearmur’s position
(discussed above) that urban structures can to some degree be anticipated.
Simmons’ three key structures are as follows: (a) traditional commerce (its
key elements are the small family-style stores and its highest expression consists
of the TBCs that emerge with the city’s foundation); (b) the planned shopping
centers (the malls that appeared in the 1960s); and (c) the power retail, which
is the spatial agglomeration of big box stores and includes power centers (i.e.,
planned concentrations of big box stores) and power nodes (i.e., unplanned
concentration of big box stores plus, at least, one shopping center).
As Simmons indicates, these three forms of retail business spatial organiza-
tion have appeared in Greater Toronto at different times and places, and each
one has its own profile designed to offer different goods and services to differ-
ent market segments. In spite of the clear differences in their spatial organiza-
tion and their relationship to the market (or perhaps because of this), these
three commercial structures exist simultaneously in the city.
Simmons’ hypothesis is that each of these structures emerges as a reaction
to the earlier structure in an attempt to create greater economies of scale, in-
crease productivity, and adapt to the constant changes in consumer behavior
and preference within a context of broader transformations: economic (i.e.,
higher income levels of the population), technological (i.e., the appearance and
availability of one or more cars per family), and lifestyles (i.e., the search for
new buying experiences such as “do it yourself” and others that imply a sense
of adventure).
For example, Simmons looks at how the highest expression of traditional
commerce, the department store located in the tbC, is a predecessor of the
planned shopping center but without parking. Thus, the department store
depends on the flow of public transportation or pedestrian traffic to achieve
the sale thresholds necessary for its development. These types of stores have
existed for a century or more and could have more than 100 square meters of
sales areas, which increased their economy of scale and their productivity.12
The planned shopping centers appeared at a time of rapid economic growth
(after the Second World War), which allowed many families to purchase a car.
At the same time, the Toronto’s tbC (and those of many cities) were saturated
12
Mexico City’s tbCs offer examples of these stores, such as El Palacio de Hierro, which dates
from the end of the nineteenth century, located on the corner of 5 de Febrero and Venustiano Car-
ranza streets.

29
Introduction
with low-quality businesses, overpopulated with low-income groups and had
increasing levels of crime. The middle- and high-income resident population
consequently decided to move their homes to the suburbs. Simmons examines
how these planned shopping centers appear in order to satisfy the demand of
these new peripheral housing developments.
This new form of spatial organization of commerce considers at least one
large anchor store (a department store or a supermarket, for example) that
serves as a main magnet for middle- and high-income consumers with a car
(and therefore includes extensive parking areas), and a group of smaller stores
that benefit from the anchor store’s attractiveness and increase their ability to
attract consumers more than they would if each small business were to work
as an isolated entity, among other reasons because they reduce the consumer’s
cost of looking for goods and services.
To some degree, the planned shopping center is a replica, on a smaller scale,
of the tbC, but with the main variables planned and controlled to increase ef-
ficiency and sales volume: the store features, the types of goods and services
offered, the uniform decoration of the exterior areas, the controlled atmosphere,
the extensive parking areas, and the guaranteed security within the shopping
center and in the parking lots, among others.
The smaller stores, Simmons points out, depend significantly on the anchor
store or stores, which often own the shopping centers. These small stores must
accept the conditions imposed by the anchor stores in order to become part of
and remain in the shopping center, such as absorbing a great part of the
rental costs of the anchor store’s space.
Simmons argues that big box stores and later chains of big box stores (i.e.,
Costco, Sam´s, Home Depot, Office Depot, Walmart, among many others)
appear as a reaction to this great imbalance between the powerful anchor stores
and the smaller stores. These new stores rely on low construction costs, limited
investment in decor, efficient inventory management, creation of significant
economies of scales, and greater productivity. They are located in the peripher-
ies to attract enormous volumes of consumers without needing to submit to
the guidelines of any anchor store. This phenomenon happened in the United
States in the 1980s and in Canada in the 1990s.13
As was to be expected by urban economy and economic geography, these
big box stores later began to spatially agglomerate. The physical interconnection
13
In Mexico, Sam´s arrived in 1991, Costco in 1992, Office Depot in 1995, and Home Depot in
2001, to mention just a few examples. For more information see the company sites on the Internet.

between them was achieved through an open air common parking area, creat-
ing the spatial structure of a very efficient financial cluster, which has been
called a power center.
Since the agglomeration tendency is self-reinforced through time (O´Sullivan,
2011), other groups of big box stores (and other power centers) and even
shopping centers soon became part of the power centers, which gave rise to
the formation of enormous commercial clusters called power nodes. According
to Simmons’ micro data, power nodes can extend up to 350,000 square meters
of sale area in Greater Toronto. The need for large extensions of land by power
centers and nodes implied locating them outside the city, especially on main
highways in the surrounding areas.
Since 2001, Simmons says, the sale surface of power centers has grown at
a rate of 93% a year and represents more than half of Toronto’s retail commerce
surface. The surface for traditional commerce sales grows at just 10% a year
and that of planned shopping centers at 15% a year.
Based on micro data analysis of the past years, Simmons concludes that the
power nodes have passed their phase of explosive growth in Greater Toronto
and that in the future they will only grow at market rhythm, maintaining their
localization outside of the city. Traditional commerce will grow stronger in the
city areas undergoing a revitalization process (i.e., gentrification) and where
there is growth due to immigration. The shopping centers are responding to
the competition by integrating big box stores in their periphery, which sooner
or later can, if they have enough available land, turn them into power nodes.
For Simmons, one of the main evolutionary trajectories of retail business
will be defined by new technology. Internet purchases are growing exponen-
tially, as can be seen with Amazon, e-Bay, and Groupon.14
Simmons also sees
that retail business will continue to move towards increasingly large stores
managed by large-scale organizations that rely on global supplier chains.
Simmons anticipates that the objective of business leaders in the future
will continue to be to increase their economies of scales to compensate for the
reduced profit margins resulting from the constant price war within the frame-
work of the growth and expansion of each region’s cities. Nevertheless, Sim-
14
Amazon began operations in 1995 selling books online and e-Bay was born as a sale and
purchase site in 1995. Both companies are well known in Mexico. Groupon is a much more recent
company (it began in 2008) and perhaps less known because of this. It is an Internet purchase site
that relies on the power of collective purchase. It is based on the idea of consolidated (or collective)
purchases to negotiate low prices with suppliers. Groupon lets its subscribers know about purchase
opportunities, and a consolidated purchase is made when they reach a certain number of buyers.

31
Introduction
mons considers it unlikely that the new commercial structures will replace the
earlier ones, because they are aimed at highly different market segments and
city areas (targets).
The Spatial Structure of Banking
in the Toluca Metropolitan Area
If the previous chapter focused on the spatial organization of retail activities,
especially those in the urban periphery and outskirts, this chapter zooms in on
the intra-metropolitan spatial structure of banking.
Financial intermediation, through commercial banking, is an essential service
for an efficient economy and for its growth benefits to spread among all mem-
bers of society. The incapacity of Mexico’s financial system to cover the entire
population, as well as micro and small businesses, has created a minority group
that has access to the services of the financial system (the banked) and a major-
ity that has only partial or no access to these services (the unbanked).15
Access to financial services in Mexico is limited, costly, and has a low pen-
etration level: in 2006, 74% of the municipalities (with 22% of the country’s
population) had no bank branches, and 85% of adults who lived in cities had
never used formal financial sector services, which is serious given that Mexico
is predominantly urban.16
The low usage level of the formal financial sector throughout the country
means that the unbanked face elevated transaction costs when paying for
public services, sending remittances, and cashing checks (even those included
in anti-poverty government programs such as Oportunidades). They also face
very high interest rates charged by alternative credit instruments (i.e., pawn
shops, moneylenders) and a very low or absent return on savings and invest-
ments (they use saving mechanisms such as tandas – group savings – or simply
keep their money at home).
15
In developed countries the opposite happens: the majority of the population is composed of
bank users (i.e., in the United States 90% are bank users and 10% are unbanked, TFRBC, 2001), but
in developing countries the situation is similar to Mexico’s (BM, 2003). It is worth noting that among
the scarce data regarding the unbanked at the intra-urban scale in México, 74% of Mexico City’s
population was unbanked in 2003 (Ruíz Durán, 2004).
16
The intra-urban scale of financial exclusion is particularly important in Mexico because of its
predominantly urban nature: the proportion of urban population in the country, which was 62.8% in
2005, will rise to 67.8% in 2030. This means that in 2030 approximately 82 million people will reside
in cities. It is estimated that in 2030 the country’s population will reach 120.9 million inhabitants
(Conapo, 2009, Institutional page: http://www.conapo.gob.mx/00cifras/5.htm).

Being unbanked (as an individual or a micro or small business) directly af-
fects income (and therefore the standard of living), because money is more
expensive, business opportunities are limited, there is no interest on savings,
and more time and energy are needed to pay bills and change checks.17
The phenomenon of the unbanked can be attributed to different barriers
that prevent the use of banking services and can be grouped into two large
categories: cost barriers and location barriers (Connolly and Hajaj, 2001; Graves,
2003; Solo, 2008).18
The first category refers, for example, to bank service com-
missions and minimum balance requirements to open an account or the mini-
mum average balance without surcharges. The second category is mainly re-
lated to access restrictions due to the spatial localization of points of service
(i.e., bank branches). Location barriers are very important even on the intra-
urban scale: 30% of Mexico City’s unbanked say that the location of the
branches is a key factor that prevents their access to the banking system, even
though the number of branches increases systematically and rapidly.19
Garrocho and Álvarez argue that the agglomerated localization of banks
largely contributes to their low spatial accessibility, which favors unbanking.
They emphasize two key questions: Do bank branches attract, repel, or have
no effect on the localization of new bank branches? What features of the
demand have more influence on bank branch localization? If these two ques-
tions regarding bank spatial organization are clarified, they argue, the loca-
tional behavior of the banking system in the intra-metropolitan space and their
effect on the unbanked population due to location barriers can be more
clearly understood.
Garrocho and Álvarez reveal a spatial banking structure (taking all banks
into consideration) using the planar K function. They statistically discover (in-
cluding significance levels) if the spatial structure is agglomerated, dispersed,
or random. They then apply the cross K function to examine the spatial attrac-
tion, repulsion, or indifference between bank branches of different banks. The
advantage of K-functions is that they permit multi-scale analysis. That is, they
17
In Mexico City, 80% of the working unbanked receive their salary in the form of a check. It is
estimated, with great precision, that the lack of banking services can cost an unbanked micro business
person 68% of his/her annual income (Ruiz Durán, 2004).
18
Problems related to the lack of consumer confidence and institutional problems within the banks
themselves that affect the quality of service have also been detected. See, for example, Rojas, 2006.
19
Bank branches continue to be a key element for the provision of financial services in Mexico.
In January 2002 there were 6,511 bank branches in the country. The number increased to 11,911 by
September 2012, an 83.0% increase in a little over six years (Cnbv, 2012).

33
Introduction
generate results at different spatial scales simultaneously, which allows us to
see if bank branches agglomerate at a certain scale and/or disperse at another,
or if their locational behavior is the same regardless of the spatial scale.
The planar K function generates clear evidence that bank branches tend to
locate agglomerately from any perspective. The cross K function demonstrates
that not all banks attract with the same intensity within the intra-metropolitan
space. In other words, there is a co-localization phenomenon that necessarily
produces large access inequalities for the population and the small and micro
businesspeople in the intra-metropolitan area.
This agglomeration tendency is not fortuitous. It can be explained in gen-
eral terms, because the banks benefit by (i) obtaining greater economies of
agglomeration (they share certain costs such as security and parking, for
example),20
(ii) reducing the cost to consumers searching for banking services,
and (iii) adopting a strategy of “follow the leader” and lowering geomarketing
research costs to ensure a prime localization (the costs of location analysis are
absorbed by the leader and the smaller banks follow within the intra-metro-
politan area).
Once the spatial structure of the offer is defined, Garrocho and Álvarez
examine the effects of the location of the main segments of bank service
demand (population and employment) on the spatial structure of Mexico’s
bank branch system. The analysis by Garrocho and Álvarez of the demand
demonstrates more than just the old story that banks follow their key custom-
ers: the medium- and high-income population and public and private eco-
nomic activities. They reveal that the most important activities that attract
bank branch localization are, in this order, (i) government activities, (ii) highest-
income population, (iii) services other than government activities, and (iv)
retail (including hypermarkets and large department stores and excluding in-
formal economy). That means that, rather than follow an activity or a popula-
tion group, bank branches specifically follow the tertiary sector (government
20
The economies of agglomeration are economic factors (i.e., savings generated by sharing
certain costs with other companies) that influence same sector companies (economies of localization)
or different sector companies (economies of urbanization), generating different advantages and
benefits by working close to one another, which gives them the incentive to form clusters (O´Sullivan,
2011). For example, when companies agglomerate they can share service costs they could not afford
on their own (i.e., security, building maintenance, computer repair, specialized consulting services) or
the labor market, to mention just a few. Furthermore, given that agglomeration economies operate
in different spatial scales (i.e., region, city) and vary by sector, it is common for the city to have a very
complex combination of agglomeration economy networks that affect different companies in very
different ways in each city area (Gordon and McCann, 2000).

services and retail commerce) and the highest-income population. However –and
this is a key contribution– bank branches follow bank branches. In other words:
offer also follows itself.
The Commercial Structure of the Traditional Business Center
of a Big Mexican City: The Toluca Metropolitan Area
From Simmons’ metropolitan scale approach in chapter 5 and Garrocho and
Álvarez in chapter 6, we go to a micro spatial analysis in the closing chapter of
the book. Chapter 7 deals with a strategic part of urban structure: the tbC. This
brings to mind Berry’s noteworthy recommendation to maintain the urban
analysis focus both on the macro scale (i.e., the regional perspective) and the
micro scale (i.e., the intra-urban perspective).
The case of the Toluca metropolitan area is an interesting one. Between
1990 and 2013 the city grew from a little over one million inhabitants to almost
two million. This explosive population growth, one of the highest of Mexican
cities, drastically altered the city’s urban structure, which ceased to be pre-
dominantly monocentric and became polycentric.
In this new context, the tbC faces competition from new and different
tertiary employment concentrating subcenters that have appeared in the met-
ropolitan area. The available money that before could only be spent in the tbC
can now go not only to the firms that agglomerate in this part of the city but
also to those that agglomerate in the emerging subcenters. The privileged
spatial situation of the tbC has disappeared.
As in many other cities in the world, the tbC of Toluca’s metropolitan zone
clings to its centuries-old economic spatial organization forms, has not managed
to adapt to the new highly competitive metropolitan environment, and shows
high levels of decline. The emerging subcenters, on the contrary, organize their
economy in innovative and more competitive spatial formats, such as power
nodes (to mention one, see Jim Simmons’ chapter in this book), and begin to
concentrate the most prestigious tertiary firms in the city.
Flores, Garrocho, Chávez, and Álvarez recognize the urgent need to design
policies and detailed actions to revitalize and enhance the tbC in this new en-
vironment. These authors argue that if these policies and actions are to be
precise and more efficient, the locational patterns of the firms first need to be
established. They specifically propose three fundamental geographic dimensions

35
Introduction
for the economic activities of the tbC: (i) their territorial orientation, (ii) their
spatial dispersion (or concentration), and (iii) their spatial longitude. The three
dimensions are directly linked to the proverbial geographical question: Where…?
The authors argue that if these essential geographic dimensions of the eco-
nomic activities of the tbC are unknown, the policies and actions directed at
this strategic city area will be designed and applied in a framework of uncer-
tainty and obscurity.
Given that the majority of tbC activities organize in geographical clusters,
the fundamental geographic dimensions of the economic activities proposed
by the authors are related to a central theme of economic geography: the di-
mensions of the economic clusters (Maskell, 2001a, 2001b).
Flores et al. understand the tertiary clusters of retail companies in Maskell’s
terms (2001b, pp. 930, 932): clusters exist because of localization economies,
regardless of the degree of company interaction. The only requirement is that
multiple firms that perform similar activities are co-localized in space, so they can
permanently and mutually monitor each other in detail and almost without
effort or cost. The main advantage of belonging to the cluster is not firm inter-
action, as is frequently suggested. Rather, it is the possibility of acquiring informa-
tion and knowledge of the market and best practices. This is the main incentive
for the co-localization of tertiary firms.
Flores et al. begin by situating the evolution of the tbC in the context of the
city’s expansion processes, and later go on to define its central concepts – in
other words, to establish the “rules of the game”. They later analyze the em-
ployment performance of the tbC and compare it with the metropolitan per-
formance, allowing them to identify the specialized economic activities of the
Toluca tbC.
These key economic activities are the object of their spatial analysis using
methods of variable complexity. They start with some simple methods, such as
the geographic centroid (also called the center median), which is the simplest
indicator to find the geographic center of a distribution of points. They then
move to standard distance and the standard elliptic deviation, which are indica-
tors used to estimate the dispersion of points around their geographic centroid,
and which the authors also use to estimate the orientation, dispersion, and
longitude of the firm clusters in their study area. They also use some more
complex methods such as the nearest neighbor index, which reveals if a pattern
of points in a bi-dimensional space is agglomerate, disperse, or random. How-
ever, since this method has at least two limitations for the case study –it does

not generate results with statistical significance levels and does not apply to
network space, such as the street network of the tbC– the authors use a more
robust spatial statistical method: the network K function (Okabe and Yamada,
2001; Yongmei and Xuwei, 2007; Garrocho et al., 2013).
Network K function allowed Flores et al. to reveal if the locational patterns
of the firms with specialized activities in the tbC of the Toluca metropolitan area
are agglomerate, disperse, or random in network spaces (one-dimensional
spaces such as the street network). One of the great advantages of the network
K function is that it provides the patterns’ agglomerate, disperse, and random
measurements at different scales simultaneously (it is a multi-scale method),
regardless of the study area dimensions. This feature is very useful, because, for
example, an activity can exhibit random patterns on one scale of analysis, but
agglomerate on another scale and disperse on another. Another great advantage
of K-functions is that the statistical certainty of the results can be calculated.
The empirical results obtained by the authors reveal an unknown reality of
the Toluca metropolitan area’s tbC: the spatial organization of the economic
activities it specializes in. In methodological terms, the agreement of the results
of the different spatial statistical methods applied, regardless of their level of
complexity, is interesting. Such coincidence demonstrates that these methods
are all useful. Flores et al. mention that the complex methods can be more ap-
preciated in the academic world. In more everyday contexts, however, such as
that of local governments, where there is often not enough time or resources
to apply them, the simple methods are very useful and more appreciated. Fi-
nally in conceptual terms, Flores et al. contribute to the definition of the ter-
tiary cluster dimensions in the tbC micro space, and relate the orientation,
dispersion, and longitude of the clusters to the pedestrian flows in the zone,
which is nothing more than spatially connecting the supply of goods and ser-
vices with the potential demand in movement.
***
This book compiles collaborations of living legends in the field of geography
with contemporary contributions generated in El Colegio Mexiquense (Mexico).
It balances theory with practice and reclaims key ideas from the past but looks
towards the future. It will surely be of use for those interested in economic and
commercial geography, which is, as Neil Wrigley states so well in chapter 2, one
of the most exciting research areas in social science. Bon voyage.

37
Introduction
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43
B.J.L. Berry: Commercial and economic geography
Radar Views
Part I

45
Commercial and
Economic Geography:
Past and Future
Brian J.L. Berry*
* Lloyd Viel Berkner Regental Professor, School of Economic, Political and Policy Sciences, The
University of Texas at Dallas. E-mail: <brian.berry@utdallas.edu>.
IT IS AN HONOR to have been asked to open this special session on commercial
and economic geography at the XXV anniversary celebrations of El Colegio Mex-
iquense. “What,” I was asked, “have been the principal research foci of the last
quarter-century, and where is the discipline likely to go from here?” I thought
long and hard about what I might say and I was brought back to the insights of
the Spanish-born American poet and philosopher George Santayana, who wrote,
“Those who cannot remember the past are condemned to repeat it” (Santayana,
1905: 284). I disagree with him. Even if we remember the past, we are likely to
repeat its underlying rhythms. It is characteristic of geography that each new
generation of scholars has tried to reinvent the field, but in so doing has re-
peated enduring themes in an intergenerational dialectic in which the values and
orientations of every second generation are more similar than they are to those
of adjacent generations. The macrohistorical process is so strong that Santayana’s
thought should be supplanted by the first three lines of T.S. Eliot’s Burnt
Norton:1
Time present and time past
And both perhaps present in time future
And time future contained in time past
1
T.S. Eliot, “Burnt Norton,” Four Quartets.

46 Part i: Radar Views
My answer to the question of what the future holds for commercial and eco-
nomic geography is to recommend that we turn to the past and to what can
be learned from the intergenerational dialectic. I can speak from personal ex-
perience about the last six decades – roughly half the time since economic
geography emerged as a modern university discipline at the beginning of the
twentieth century – since I launched my academic career in the late 1950s. To
understand the alternating generational themes, we must, however, turn to
deeper history.
Two Contesting Themes
A useful place to start is in the early seventeenth century as Dutch navigators
reached out from the Low Countries, and Amsterdam’s merchants sought infor-
mation that might be useful in educating their ship captains and adventurers,
and extending their trading empires. A young physician from Leiden, Bernhardus
Varenius, impressed by the navigators, responded in 1650 by setting down what
was known about the Earth and its planetary behavior, latitude and longitude,
globe and map construction, and the principles of navigation. His Geographia
Generalis2
became the first financially rewarding educational publication, a re-
sponse to the needs of commerce—a book that (in hindsight) was the first to lay
down the basic principles underlying geographic information systems (gis) and
the first to serve the practical needs of commercial geography. The work was
revised in an edition published by Sir Isaac Newton in 1672, and subsequent
editions were published and used as late as the early nineteenth century.
Following Varenius, concern emerged about the statistics used to character-
ize areas, and about how they should be used. A conflict surfaced, which was to
shape geographical inquiry in the years that followed. In 1660, a North German
philosopher, Herman Conring, began to lecture about what he termed “Statistik,”
by which he meant the records necessary for the performance of state functions
and the categories by which a state should be characterized. Like Thomas Jef-
ferson a century later, Conring held the view that statistics were matters of state
(Lindenfeld, 1997). At the same time, in 1662, an Englishman, John Graunt, the
acknowledged father of demography, published his Observations on the Bills of
2
Published by L. Elzevier of Amsterdam in 1650, the year in which Varenius died.

47
Mortality.3
This was the same year in which, another Englishman, William Petty,
published his first work in economics, the Treatise of Taxes and Contributions.4
Graunt and Petty believed that social and economic problems should be subject
to systematic analysis and that there should be a continuing search for causal
relationships among measurable variables. The proper function of statistics was
to further such inquiry. There were accompanying ideological differences. Conring
advocated a statist ideology, whereas Petty believed in laissez-faire, a central
theme in Political Arithmetick,5
a work written around 1676 but published post-
humously in 1690.
A bitter debate ensued about the proper nature and value of statistics that by
the end of the nineteenth century , during the formative years of modern geogra-
phy, took on a particular form—a tension between “inventory and description” and
“explanation” (Meitzen, 1891). On the descriptive side, textbooks focused on the
characteristics of states and regions and on the information needed by future lead-
ers in business and politics. These works culminated in G.G. Chisholm’s Handbook
of Commercial Geography,6
an account of world production and trade organized
by commodity and country and laid out against a backdrop of climate and geol-
ogy. But younger geographers were excited by the explanatory schemes of Social
Darwinism and developed an explicit geographical version, Environmental Determin-
ism. Their new theory was clearly set down by the first president of the Association
of American Geographers, William Morris Davis, in his 1906 presidential address:
“Any statement is of geographic quality if it contains…some relation between an
element of inorganic control and one of organic response” (Davis, 1906: 71). To
Davis, human society was an organism that survived by adjustment to the physical
environment; the nature of its growth thus was environmentally prescribed. “Mere
description” was pushed from the new discipline’s mainstream and replaced by an
environmentalist idea that was so strong that sociologist Pitirim A. Sorokin (1964),
termed it, “The Geographical Theory” With this replacement, the contesting theo-
ries of the eighteenth and nineteenth centuries became the generational themes
that have alternated in the geography of the twentieth century.
3
London: Thomas Roycroft, 1662.
4
London: for N. Brooke, 1662.
5
London: for Robert Clavel, 1690.
6
London: Longmans, Green & Co., 1888.

ADVANCES IN COMMERCIAL GEOGRAPHY

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ADVANCES IN COMMERCIAL GEOGRAPHY