Spatial proximity is a spatial principle that holds that things that are close together are perceptually grouped together. It is also considered a method or approach in the areas of design, science, and venture capital financing, among others. As an economic concept, it is also known as the actor strategy, which examines the involvement of actors within a given economic space.[1]

Concept

Spatial proximity as a concept has been defined as the geographical context that influences the likelihood of an individual's participation as well as the probability of people's interaction.[2] The context may also be identified as local, territorial, or physical.[3] Such proximity is said to facilitate frequent face-to-face interaction and transfer of information as well as the reduced cost to expenses incurred in the process. For example, in venture capital, high quality of spatial proximity benefit the actors because it is dependent on the reliable and timely exchange of information and frequent interactions.[3] To some extent, spatial proximity may be substituted partially by access to improved transportation.[4]

Spatial proximity, as Gestalt grouping principle, builds on the benefit of perceptual organization.[5] In the principle called the law of pragnanz (precision), groupings allow the identification of the whole form since humans seek a coherent and elegant experience.[6] Unlike the holistic system of the Gestalt concept, however, spatial proximity can be decomposed into separable mechanisms.[7]

The concept of spatial proximity explains that there is efficiency achieved in neural processing and eye movements if related information is spatially grouped as information is more readily picked up.[8] In this proximity relationship, things that are close together are perceptually grouped together.[8] It is held that selective attention to parts of a stimulus that are concentrated in a compact region of an indispensable attribute is easier than a selective attention to those that are scattered over various regions of an indispensable attribute.[9]

Applications

Spatial proximity has been applied to several fields. It has been used in architecture[10] and urban design.[11] The concept was used to evaluate mass trauma as a risk factor for the onset of psychopathology.[12] It is also considered one of the elements that compose the so-called "surrounding reality" (the here and now) in psychological propinquity, which associates what is close to what is safe and desirable.[13]

Spatial proximity is also used in organizational analysis and economics.[14] Recent studies associate the concept with Francois Perroux's theory of "economic space".[4] As an economic theory, it provides "a response to the issues related to business-to-business cooperation, the location of activities, the innovation process, the function of clusters, the mechanism of local governance, etc."[1] Also named the actor theory, it is influenced by the economics of convention, which seeks to demonstrate how economic actors are equipped with bounded rationality and tend to develop cooperative behavior patterns in response to uncertain situations.[1]

Venture Capital

There are studies that reveal spatial proximity's role in venture capital investment. It is found, for example, that in Germany there is a decline in the probability of financing relationship with the increase of journey time, particularly in a dense economy.[15] Spatial proximity affects several stages in venture capital investment. Before actual investment, informants of financial institutions are spatially bounded.[16] Without the element of information, spatial proximity still affects investment because VC firms and angel investors rely on personal and professional relationships, which are often localized in close proximity to where they are based.[16] Even in cases of cross-border venture capital investments, the investing firm still relies on a local partner that acts as the lead investor.[16] Geographical distance, in this case, is compensated by the cognitive and organizational proximity within partnerships.[17] It is suggested that the spatial characteristics of investment are the result of aggregate-risk-averse behavior of venture capitalists.[18]

The role of spatial proximity can also be attributed to the concentration of venture capital markets. In the United Kingdom, it was found that little investment flows into the peripheral region. This is attributed to a lack of good growth potential in the periphery and also a form of historical legacy that is perpetuated by regional prejudice.[18]

References

  1. 1 2 3 Boutillier, Sophie; Carré, Denis; Levratto, Nadine (2016). Entrepreneurial Ecosystems, Volume 2. Hoboken, NJ: John Wiley & Sons. p. 35. ISBN 978-1-119-28516-8.
  2. ↑ "Spatial Proximity". 2023. Retrieved October 12, 2023.
  3. 1 2 Bender, Marko (2011). Spatial Proximity in Venture Capital Financing: A Theoretical and Empirical Analysis of Germany. Springer Science & Business Media. p. 41. ISBN 978-3-8349-2684-5.
  4. 1 2 Reggiani, Aura; Fabbri, Daniele (2019). Network Developments in Economic Spatial Systems: New Perspectives. Routledge. p. 92. ISBN 978-1-138-33350-5.
  5. ↑ Wagemans, Johan (2015). The Oxford Handbook of Perceptual Organization. Oxford: Oxford University Press. p. 650. ISBN 978-0-19-968685-8.
  6. ↑ Landa, Robin (2016). Advertising by Design: Generating and Designing Creative Ideas Across Media. Hoboken, NJ: John Wiley & Sons. p. 26. ISBN 978-1-118-97105-5.
  7. ↑ Kimchi, Ruth; Behrmann, Marlene; Olson, Carl R. (2003). Perceptual Organization in Vision: Behavioral and Neural Perspectives. Mahwa, NJ: Psychology Press. p. 61. ISBN 0-8058-3872-4.
  8. 1 2 Ware, Colin (2019). Information Visualization: Perception for Design. Cambridge, MA: Morgan Kaufmann. pp. 185–186. ISBN 978-0-12-812875-6.
  9. ↑ Kubovy, Michael; Pomerantz, James R. (2017). Perceptual Organization. Oxon: Routledge. p. 90. ISBN 978-1-315-51236-5.
  10. ↑ Caneparo, Luca (2013). Digital Fabrication in Architecture, Engineering and Construction. Dordrecht: Springer Science & Business Media. p. 67. ISBN 978-94-007-7136-9.
  11. ↑ Roberto, Elizabeth (2018). "The Spatial Proximity and Connectivity Method for Measuring and Analyzing Residential Segregation". Sociological Methodology. 48 (1): 182–224.
  12. ↑ Acton, Ashton (2012). Advances in Homeland Security Research and Application: 2011 Edition: ScholarlyBrief. Atlanta, GA: ScholarlyEditions. ISBN 978-1-4649-3103-1.
  13. ↑ André, Torre; Delphine, Gallaud (2022). Handbook of Proximity Relations. Northampton, MA: Edward Elgar Publishing. p. 213. ISBN 978-1-78643-477-7.
  14. ↑ Reggiani, Aura; Fabbri, Daniele (2019). Network Developments in Economic Spatial Systems: New Perspectives. Oxon: Routledge. p. 92. ISBN 978-1-138-33350-5.
  15. ↑ Lutz, Eva; Bender, Marko; Achleitner, Ann-Kristin; Kaserer, Christoph (2013-11-01). "Importance of spatial proximity between venture capital investors and investees in Germany". Journal of Business Research. 66 (11): 2346–2354. doi:10.1016/j.jbusres.2012.04.016. ISSN 0148-2963.
  16. 1 2 3 Cooke, Philip; Asheim, Bjørn; Boschma, Ron; Martin, Ron; Schwartz, Dafna; T_dtling, Franz (2011). Handbook of Regional Innovation and Growth. Cheltenham, UK: Edward Elgar Publishing. p. 497. ISBN 978-1-84844-417-1.
  17. ↑ Kilper, Heiderose (2009). German Annual of Spatial Research and Policy 2009: New Disparities in Spatial Development in Europe. Berlin: Springer Science & Business Media. p. 62. ISBN 978-3-642-03401-5.
  18. 1 2 Green, Milford B. (2011). Venture Capital: International Comparions. Oxon: Routledge. p. 5. ISBN 978-0-415-61102-2.
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