Commercial and Transport Geography

Commercial geography is concerned with transactions. As each transaction involves movements of people, freight and information, there is a close relationship between the sphere of transactions (the geographical setting of transactions) and the sphere of circulation (the geographical setting of movements). This implies transaction costs and transportation costs. The main transaction costs are:

• Search and information costs. Costs related to finding the appropriate goods on the market, who has them and at what price.
• Negotiation costs. Costs involved in reaching an agreement with the other party to the transaction, the contract being the outcome.
• Policing and enforcement costs. Costs related to ensuring that both parties respect the terms of the contract and, if not the case, taking legal actions to correct the situation.