Why Do Firms Relocate? Lessons from a Regional Analysis

In recent years, the qualitative evolution of relocations (from low-cost offshoring to more technologically intensive relocations) has become a new concern in political debate. Focusing on these new trends, the aim of this paper is to better understand relocations from the firms' point of view. The concept of relocation is reformulated by adopting a broad definition considering it as a specific dimension of firms' mobility options. We consider three analytical dimensions: relocation as a productive problem ("relational space" for coordination), relocation in a territorial dimension ("geographical space") and relocation as a complex decision-making process ("political space"). On this basis, we combine two strands of literature (economics of proximity and institutional approaches of the firm) for a better understanding of the decision-making process and the resulting diversity of situations. The framework is finally applied to the specific case of the Aquitaine region of southwest France in order to identify the conditions of anchoring and mobility of firms in spatial terms. Our aim is to show that the decision-making process of relocations cannot be reduced to a simple cost calculation, leaving room for local public policies.