In a world of constant variation, locational patterns of firms and industries affect the cost of required adaptations. The efficiency of a locational decision is influenced by the extent and character of the variation with which a firm must cope. Adaptation to change is defined here in the context of the theory of the division of labor. Labor must be allocated both to tasks and to locations. A set of stylized examples for multiplant firms demonstrate that the advantages of a geographically decentralized pattern depend on the extent and frequency of change. Spatial variation in the pattern of change also has important effects.
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