What is the difference between Coverage, Shapefiles and Geodatabases in ArcGIS?

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I was wondering about the difference in spatial data storage methodology used by Coverages, Shapefiles and Geodatabases in ArcGIS. Coverage was the initial format, followed by Shape Files and now Geodatabases. So what has improved in these newer formats of Shapefiles and Geodatabases?

It would be great if someone could please explain it with examples.

Thanks.



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