Footloose: An analysis of the drivers of firm relocations over various distances

12-04-2012 | Publication

This paper examines the differences in the drivers of short- and long-distance relocations of firms. It presents an event history analysis of a panel data set of Dutch firms. The findings indicate that short-distance relocations (within the same municipality and labour market) are triggered by growth and the corresponding need for more space, while longer distance relocations are mainly influenced by regional characteristics.

A spatial concentration of similar or related firms, a higher level of urbanisation and R&D intensity within the region keep firms from leaving their labour market region. However, this does not apply to firms that are located in a region with a higher share of innovative firms, as they are more inclined to relocate outside their region.