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Modelling industrial firm relocation with impacts of spatial dependence

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  • Youngsoo An
  • Li Wan

Abstract

The location choice of industrial firms has been studied extensively. However the relocation choice of industrial firm remains under-researched. In this study, we develop a multinomial logit model for firm relocation choices that considers both origin and destination attributes. The proposed model is empirically estimated with firm registration data for the Seoul Metropolitan Area. The estimation results show that the network distance for relocation is an important factor for manufacturing firms; reduced land costs is likely to be a significant economic factor in relocation choice of manufacturing firms. In terms of the impacts of spatial dependence, we clarify two types of spatial dependence in literature, i.e. the neighbourhood effects from contiguous locations and the extended spatial spillovers in agglomeration economy. Our test shows that both the neighbourhood and agglomeration effects are significant for high-tech industry, but not for heavy industry. Sensitive tests are carried out to determine the optimum catchment radius for measuring the agglomeration effects for each manufacturing firm types. We also investigate the possible relocation choice variance among manufacturing firms of different employment size.

Suggested Citation

  • Youngsoo An & Li Wan, 2018. "Modelling industrial firm relocation with impacts of spatial dependence," International Journal of Urban Sciences, Taylor & Francis Journals, vol. 22(1), pages 80-103, January.
    • Handle: RePEc:taf:rjusxx:v:22:y:2018:i:1:p:80-103
    DOI: 10.1080/12265934.2017.1352475
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    1. repec:dgr:rugsom:02d31 is not listed on IDEAS
    2. Michiel de Bok, 2004. "Explaining the location decision of moving firms using their mobility profile and the accessibility of locations," ERSA conference papers ersa04p338, European Regional Science Association.
    3. Pellenbarg, P.H. & Wissen, L.J.G. van & Dijk, J. van, 2002. "Firm relocation: state of the art and research prospects," Research Report 02D31, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
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    Cited by:

    1. Youngsoo An & Li Wan, 2019. "Monitoring Spatial Changes in Manufacturing Firms in Seoul Metropolitan Area Using Firm Life Cycle and Locational Factors," Sustainability, MDPI, vol. 11(14), pages 1-22, July.

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