The cost-saving benefits of locating near factors which are external to a firm, such as locally available skilled labour, training, and research and development facilities. Moran et al. (2002) PHG 26, 4 writes that regional specialization is sustained by external economies of scale that impart certain advantages and ‘lock’ regions into particular development paths. See also Crescenzi et al. (2007) J. Econ. Geog. 7, 6.