The central contention is that there is a coincidence of research interests between industrial marketing and economic geography in relation to spatial embeddedness in business relationships. There are nuances in relational economic geography that have not been addressed in industrial marketing research, notably that in addition to geographic proximity, co-located actors may experience more or less cognitive, organizational, social and institutional proximity. A conceptual framework is built around the processes of proximation and distanciation, which, it is argued, can be either competitively generative or competitively degenerative. These processes are investigated empirically through a qualitative study, grounded in structuration theory, of a peripheral region of England that has suffered lengthy industrial decline. The qualitative study extended over six years and encompassed 87 interviews with senior managers from both public and private sector organizations. Competitively generative proximation processes are found to be the most prominent in the region; such processes involve a mixture of cognitive cost-benefit calculation and affective commitment to the region. Important enduring relational states are identified and elaborated, notably regional loyalty and relational isolation.