Economic Effects of an Exhaustible Irrigation Water Supply: Texas High Plains

Specialization by a region is determined primarily by resources available and the available markets for the products. In addition, specialization in the production of a product or in an industry is an initial stage of regional development but may not be sufficient. As firms locate in a region to produce with the available resources, a derived demand will develop for substitute and complementary resources. Input supply firms will locate in the region to satisfy the derived demand for resources. In addition, other firms will locate in the region to process some of the output of the emerging industry. As associated industries locate in the area, an interdependency will develop between the industry's supply requirements and/or markets for their products. Consequently, regional development has a tendency to include firms that are interdependent.