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The Effects of Spatial Mobility on the Performance of Firms

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  • Joris Knoben
  • L. A. G. (Leon) Oerlemans
  • R. P. J. H. (Roel) Rutten

Abstract

A considerable body of research has analyzed the impact of a firm’s geographic position and levels of organizational and territorial embeddedness on its performance. Generally these studies have assumed that firms are immobile. Research that has focused on the effects of the relocation of firms has treated firms mainly as atomistic actors that can move freely in geographic space and has tended to neglect the influence of changes in a firm’s geographic position and level of organizational and territorial embeddedness. We integrated insights from both streams of literature to answer the research question, “What are the effects of relocation on a firm’s performance, and what is the influence of a firm’s geographic position and its level of organizational and territorial embeddedness on this relationship?” On the basis of our analysis of data from a survey of managers of Dutch automation services firms, we found that the degree of impact of a firm’s relocation on its performance depends on the characteristics of the relocation. For example, a move to an urbanized region hampers performance, whereas a move to a research and development-intensive region fosters a higher level of performance. Furthermore, firms with high levels of organizational embeddedness suffer in the short term from relocation, but benefit in the long run.
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  • Joris Knoben & L. A. G. (Leon) Oerlemans & R. P. J. H. (Roel) Rutten, 2008. "The Effects of Spatial Mobility on the Performance of Firms," Economic Geography, Clark University, vol. 84(2), pages 157-183, April.
    • Handle: RePEc:bla:ecgeog:v:84:y:2008:i:2:p:157-183
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    File URL: http://hdl.handle.net/10.1111/j.1944-8287.2008.tb00402.x
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    1. Ejaz Ghani & Arti Grover Goswami & William R. Kerr, 2012. "Is India’s Manufacturing Sector Moving Away From Cities?," Harvard Business School Working Papers 12-090, Harvard Business School.
    2. Claver-Cortés, Enrique & Marco-Lajara, Bartolome & Manresa-Marhuenda, Encarnación & García-Lillo, F. & Seva-Larrosa, Pedro, 2017. "Location Decisions and Agglomeration Economies: Domestic and Foreign Companies," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 39, pages 99-135.
    3. Alberto Marzucchi & Davide Antonioli & Sandro Montresor, 2012. "Research cooperation within and across regional boundaries. Does innovation policy add anything?," JRC Research Reports JRC76320, Joint Research Centre.
    4. In Hyeock (Ian) Lee, 2022. "Startups, relocation, and firm performance: a transaction cost economics perspective," Small Business Economics, Springer, vol. 58(1), pages 205-224, January.
    5. Antonin Bergeaud & Simon Ray, 2021. "Adjustment Costs and Factor Demand: New Evidence from Firms’ Real Estate [The heterogeneous impact of market size on innovation: evidence from French firm-level exports]," The Economic Journal, Royal Economic Society, vol. 131(633), pages 70-100.
    6. Atakhan-Kenneweg, Melda & Oerlemans, Leon A.G. & Raab, Jörg, 2021. "New inter-organizational knowledge tie formation after firm relocation: Investigating the impact of spatial, relational, and temporal context," Journal of Business Research, Elsevier, vol. 127(C), pages 264-276.
    7. Sofie De Prijcker & Sophie Manigart & Veroniek Collewaert & Tom Vanacker, 2019. "Relocation to Get Venture Capital: A Resource Dependence Perspective," Entrepreneurship Theory and Practice, , vol. 43(4), pages 697-724, July.
    8. Wei, Wei & Zhang, Wan-Li & Wen, Jun & Wang, Jun-Sheng, 2020. "TFP growth in Chinese cities: The role of factor-intensity and industrial agglomeration," Economic Modelling, Elsevier, vol. 91(C), pages 534-549.
    9. Weterings, Anet & Boschma, Ron, 2009. "Does spatial proximity to customers matter for innovative performance?: Evidence from the Dutch software sector," Research Policy, Elsevier, vol. 38(5), pages 746-755, June.
    10. Wenying Fu & Javier Revilla Diez & Daniel Schiller, 2017. "Determinants of Networking Practices in the Chinese Transition Context: Empirical Insights from the Pearl River Delta," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 108(2), pages 205-219, April.
    11. Fernando Merino, 2017. "Offshoring, outsourcing and the economic geography of Europe," Papers in Regional Science, Wiley Blackwell, vol. 96(2), pages 299-323, June.

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