The location choice of technology-based firms: a stated choice experiment of science park alternatives

Technology development is increasingly important for creating efficient and sustainable economies. One of the innovation policies are science parks, area developments where technology-based firms and knowledge-based institutions co-locate. Preferences of technology-based firms relate to the presence and quality of certain facilities, services, and location attributes, which are means for achieving organizational goals. As science parks are locations that generally offer a mix of such facilities and services, it can be configured in numerous ways. The gap between what science parks offer and what tenants need has been acknowledged as troublesome by science park managers and tenants as this gap can negatively influence the performance of science parks and their tenants. Therefore, this study focuses on the preferences of technology-based firms in relation to science park attributes and if different target groups can be distinguished from these preferences. To collect data about preferences, an online survey is distributed among technology-based firms both on and off science parks in the Netherlands. Using the technique of stated-choice experiments, decision-makers of technology-based firms (i.e. CEOs) are presented carefully designed hypothetical science-park locations and asked to indicate which location they would prefer if they would relocate. In the experimental design used, each hypothetical location consists of seven attributes each with three levels. The choice data allows for estimating the preference values for the different levels of each attribute, while taking into account the respondent’s current situation, using a discrete choice model as framework (a latent class model). This research provides insights on which science park attributes are desirable for technology-based firms and how much firms are willing-to-pay for particular attributes. Furthermore, differences in preferences between distinct target groups among technology-based firms are analyzed. For practice, the insights allow management of science parks to better adapt services and location characteristics to demands of the target groups of interest.