# Market-Based Economic Identity

## Definition

The way in which the characteristics and extent of local markets shape the economic activities, specialisations, and development patterns of different regions and communities. Market-based economic identity determines what types of production and trade are viable in different locations.

## Source Chapter

Book I, Chapter 3

## Context

Smith shows how different regions develop distinct economic identities based on their market access: coastal areas become trading centres, river regions develop industries supported by inland navigation, while isolated inland areas remain focused on subsistence agriculture.

## Economic Domain

General Theory

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