Firm relocation decisions in The Netherlands: An ordered logit approach

This article explores the determinants of firm migration in The Netherlands. First, based on the existing literature a theoretical framework is developed. Second, based on aggregate data firm relocation processes in The Netherlands are discussed in terms of numbers, sectoral composition, origins and destinations (regions), distance moved and employments effects. In the third part a formal model will be tested using individual data of firms. The relocation decisions of individual firms will be related to firm and location characteristics by means of an ordered logit model. The results indicate that the decision to relocate is mainly determined by firm internal factors and to a lesser extent by site related factors. Received 1 July 1999 / Accepted 28 November 1999     

Start-ups and relocations: Manufacturing plant location in Portugal

This article analyses the spatial pattern of plant start-ups and plant relocations in Portugal between 1986 and 1997. The results show that start-ups and relocations are not attracted by the same set of location characteristics. The probability of a plant start-up is more strongly related to increases in local market size and labour force qualification, lower labour costs, and a more diversified economic environment. In contrast, relocations show a greater preference for areas with better national market accessibility, availability of producer services and a larger industrial basis. Relocations are also much more strongly attracted by the provision of inter-regional motorways. The results are consistent with the assertion that firms value location attributes differently over the plant life cycle.Received: 29 January 2003, Accepted: 3 March 2004, JEL Classification: L6, R3, R4Financial support from the ESRC, grant T026271031 and grant RES-000-22-0056 is gratefully acknowledged. I would like to thank Paulo Guimarães for his invaluable assistance with the establishment data for Portugal and his helpful suggestions, and Peter Bibby for his support with GIS programming. I have also benefited from comments and suggestions by Harvey Armstrong, Max Craglia, John Henneberry, and Ricardo Mora.     

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

This paper examines the differences in the drivers of short and long distance firm relocations by conducting an event history analysis on a panel dataset of Dutch firms. Our findings indicate that short distance relocations (within municipalities and labour markets) are triggered by growth and the corresponding need for more space, while longer distance relocations are mainly influenced by regional characteristics. The spatial concentration of similar or related firms, a higher level of urbanization and R&D intensity keep firms from leaving their labour market region, but firms are more inclined to leave regions with a higher share of innovative firms.     

Agglomeration and networks in spatial economics

Abstract. We consider the parallel developments in the economics of agglomeration and the economics of networks. We explore the complementarities between the productivity benefits of agglomeration and those of network linkages, arguing that networks of actors dispersed over space may substitute for agglomerations of actors at a single point.     

Agglomeration economies in classical music

This study investigates agglomeration effects for classical music production in a wide range of cities for a global sample of composers born between 1750 and 1899. Theory suggests a trade‐off between agglomeration economies (peer effects) and diseconomies (peer crowding). I test this hypothesis using historical data on composers and employ a unique instrumental variable – a measure of birth centrality, calculated as the average distance between a composer's birthplace and the birthplace of his peers. I find a strong causal impact of peer group size on the number of important compositions written in a given year. Consistent with theory, the productivity gain eventually decreases and is characterized by an inverted U‐shaped relationship. These results are robust to a large series of tests, including checks for quality of peers, city characteristics, various measures of composers' productivity, and across different estimations in which also time‐varying birth centrality measures are used as instrumental variables.     

Agglomeration and firm‐level productivity: A Bayesian spatial approach

This paper estimates the impact of industrial agglomeration on firm‐level productivity in Chinese manufacturing sectors. To account for spatial autocorrelation across regions, we formulate a hierarchical spatial model and use a Bayesian instrumental‐variable approach. We find that agglomeration of the same industry (i.e., localization) has a productivity‐boosting effect, but agglomeration of urban population (i.e., urbanization) has no such effect. In addition, the localization effect increases with the educational levels of employees and the share of intermediate inputs in gross output. These results may suggest that agglomeration externalities occur through knowledge spillovers and input sharing among firms producing similar manufactures.     

Heterogeneous households and firms in an urban model with open space and agglomeration economies*

This paper develops a model with heterogeneous households and firms that can locate anywhere in the city. The main features of the model are household preferences for open space which depend on distance to the greenbelts at the city periphery, and agglomeration economies for firms. Numerical results show equilibrium location patterns, rents, and wages under different model specifications. Under most conditions, monocentric location patterns (where there is a higher concentration of firms in the centre zones compared to surrounding zones) are observed, but duocentric location patterns for firms can emerge if both open space values and travel costs are high.     

Impacts of regional development strategies on growth and equity of Korea: A multiregional CGE model

This paper is concerned with the assessment of major regional development strategies such as the three Coastal area development strategies (East Coast Development, South Coast Development, and West Coast Development) and the Seoul-Pusan development corridor strategy in terms of efficiency and equity. Multiregional Computable General Equilibrium for Korea is developed to capture the economic impact of regional investment expenditures, estimating the time-series influences of regional development alternatives on economic growth, inflation, welfare, income distribution, and interregional economic inequality for ten periods. In a sense that the main point of concern in the national development planning of Korea is with the question of improvement of national competitiveness with more equitable interregional income distribution, it is necessary to promote the West Coast region rather than the Seoul-Pusan development corridor. The West Coast regional development can lead to substantial gain in GDP and reduction in regional income disparity. In a multinational economic perspective, this regional development is expected to contribute to the economic cooperation of Northeast Asia and to enhancing the joint comparative advantages between China and Korea. However, it might worsen the income inequality in the long run. Received: September 1999/Accepted: September 2001     

Location, agglomeration and infrastructure

Abstract. In this article we discuss the relationships between transportation infrastructure, firm location, agglomeration and regional development. We will argue that the spatial transaction costs faced by modern firms have changed over recent decades, and that this has changed the ways in which transportation infrastructure contributes to form location behaviour and regional economic development. Therefore, in order to analyse these issues, it is necessary to consider the spatial transaction costs faced by modern firms and to investigate the conditions under which reductions in these costs due to infrastructure improvements will allow firms to move. These complex relationships are seen to be mediated via different geography-firm-organisation structures and consideration of these is essential for any realistic evaluation of the role of transportation infrastructure.     

Agglomeration and spillovers in a simultaneous framework

Previous studies have emphasized reduced transaction costs, knowledge spillovers, diverse intermediate goods suppliers, and deep labor pools as possible drivers of firm agglomeration. Among these candidates, knowledge spillovers lie at the heart of discussions in the literature. If knowledge spillovers are so important, it follows that firms tend to locate in proximity to capitalize on the knowledge stock in neighboring firms. Therefore, agglomeration and spillovers reinforce each other. However, most existing empirical studies ignore the potential endogenous relationship between the two. Moreover, few studies have even attempted to measure knowledge spillovers. In this paper, I address both issues by developing and estimating a simultaneous equation model of agglomeration and knowledge spillovers. The results suggest that traditional single equation models do indeed suffer endogeneity and that the accuracy of the estimation can be substantially improved by employing a simultaneous system.Received: June 2003/Accepted: March 2004The author gratefully acknowledges valuable comments and constant encouragement from Edward Feser.     

The bright side of MAUP: Defining new measures of industrial agglomeration*

We present two new methodologies which exploit the ‘bright side’ of the modifiable areal unit problem. The first one produces an estimate of industrial agglomeration which significantly improves on existing indices; the second one provides a ranking of industries according to their responsiveness to labour market determinants of agglomeration. An empirical application based on US data shows that those industries which are highly dependent on the labour market in choosing their location are a mix of low and high skill sectors. Furthermore, we find that labour market determinants explain around one quarter of the variation of spatial agglomeration across industries. Resumen. Presentamos dos metodologías nuevas que hacen uso del “lado bueno” del problema de la unidad espacial modificable. La primera produce una estimación de la aglomeración industrial que mejora de manera significativa los índices existentes y la segunda proporciona una clasificación de las industrias en función de su capacidad de respuesta a determinantes de aglomeración para el mercado laboral. La aplicación empírica de estas metodologías con datos de los EE.UU. muestra que las industrias que dependen fuertemente del mercado laboral a la hora de elegir su ubicación forman una mezcla de sectores tanto de alta como de baja cualificación. Asimismo, observamos que los determinantes del mercado laboral explican aproximadamente una cuarta parte de la variación de la aglomeración espacial entre industrias.      

Firm location and monopolistic competition

This paper investigates the equilibrium spatial distributions of firms in a circular city under monopolistic competition. We show that the uniform distribution constitutes an equilibrium for a very general class of transport cost functions. Moreover, we establish that symmetric partial agglomeration arises as an equilibrium if and only if the transport cost function is linear and the number of locations is even. We also find that all rotationally symmetric distributions with continuous support are spatial equilibria if the transport costs are linear. This multiplicity of equilibria however disappears in the case of strictly concave transport costs: the uniform distribution is then the unique spatial equilibrium distribution with continuous support.     

Factor distribution, capital intensity and spatial agglomeration

This paper investigates the effect of capital on agglomeration behavior within a framework of the core-periphery model. Capital is interregionally mobile in the short-run, whereas labor is mobile in the long-run. In conclusion, (i) capital and industries are distributed among regions more equally than workers when transport costs are sufficiently high, and the relation is reversed when transport costs are sufficiently low; (ii) a rise in capital intensity stimulates agglomeration in the economy.Received: July 2003/Accepted: February 2004I am indebted to Professors M. Fujita and K. Yamamoto for valuable comments on an earlier draft. I also wish to thank Professors T. Mori, T. Kinugasa, T. Kuroda, M. Makabenta and two anonymous referees for helpful suggestions.     

Urban spatial structure,agglomeration economies,and economic growth in Barcelona: An intra‐metropolitan perspective*

This paper presents an intra‐metropolitan approach to analyse the impact of urban spatial structure on local economic growth. Focusing on the Barcelona metropolitan region (BMR) between 1986 and 2001, we estimate a municipal employment growth model in which dynamic agglomeration economies related to urban spatial structure are considered using distance to employment centres, to assess metropolitan effects, and distance‐weighted variables, to measure neighbourhood effects. The results obtained show the existence of neighbourhood specialization economies and metropolitan urbanization‐localization economies fostering local growth. All of this leads to the paper's main conclusion: urban spatial structure is important for economic growth in an intra‐metropolitan context.     

Determinants of new firm success

The differences between new firms, even the differences present right at the start, may affect their life course and success over time. This article addresses the determinants of success of Dutch start-ups from a longitudinal perspective. After an overview of the literature on both the definition of success and the success factors of new firms we test how new firm characteristics relate to firm growth in number of employees using a panel of nearly 2,000 firms. In addition to a large firm size right from the start, good preparation, having a business partner, and some years in salaried employment also enhance firm growth. Based on these success determinants we construct a typology of starters that may be used to predict future growth chances. Received 25 February 1999 / Accepted 10 December 1999     

Production-location decision under duopoly with managerial incentives

The validity of the profit-maximizing assumption has long been doubted by many economists. One reason for the deviation from profit maximization that has been emphasized is the separation of ownership and management. This paper attempts to examine the spatial consequences of this separation under duopoly where managers compete in quantities, as in the Cournot model, and owners choose their managers' incentives and plant locations. A complete analysis, including the exclusion theorem, comparisons of optimal locations under the incentive equilibrium with those under profit-maximization, and comparative statics, is provided. It is demonstrated that the separation of ownership and management has significant implications for firms in relation to their location decisions. Received: October 2000/Accepted: August 2001     

An equation by any other name is still the same: on spatial econometrics and spatial statistics

Statistics is a branch of mathematics concerned with the collection, quantification, analysis, interpretation, and presentation of real-world data, and the use of probability theory to estimate population parameters with these data. Spatial statistics is a subset of statistics that is concerned with handling the special problems associated with geographically distributed data, which include spatial point patterns, regional and lattice measurement aggregations, irregularly spaced site-specific measurements on a surface, and image analysis. Meanwhile, econometrics is concerned with the application of statistical methods to the study of economic data and problems. When coining the term spatial econometrics in 1979, Paelinck and Klaassen characterized it as a subset of econometrics that is concerned with the role of spatial dependence in regional economic model response and explanatory variables, asymmetries in spatial relationships, the specification of geographic structure governing spatial interactions, and the explicit modeling of space. We outline and discuss principal similarities (e.g., testing for the presence of spatial autocorrelation) and differences (e.g., map generalization) between spatial statistics and spatial econometrics. In doing so, our goal is to help clarify past, present, and future relationships between these two subfields.     

Impacts of national development and decentralization policies on regional income disparity in Korea

This paper analyzed the effects of national development and decentralization policies on the regional income disparity in Korea. It also attempted to test whether there was a structural change in the causal relationship between income inequality and its determinant factors. This study found that the degree of variation in regional incomes was positively correlated with the spatial distribution of decentralization instruments such as educational services, employment, infrastructure facilities, and information network variables. The effects of some decentralization policies on regional income inequality were fully realized within a period of three years. Finally, the impacts of the spatial decentralization of public goods on regional inequality fluctuated until the early 1980s but were stabilized as industrial restructuring and spatial reorganization progressed during the 1990s. Received: December 2001/Accepted: June 2002