Industrial Location Economics

Industrial Location Economics

Edited by Philip McCann

Because space is not homogenous, economic activities occur in different locations. Understanding the reasons behind this and understanding exactly how industries are spatially organized is the central theme of this book. Industrial Location Economics discusses different aspects of industrial location behaviour from a variety of theoretical and empirical perspectives. Each of the analytical traditions provides insights into the nature of industrial location behaviour and the factors which can influence it.

Chapter 4: Firm Migration

Piet H. Pellenbarg, Leo J.G. van Wissen and Jouke van Dijk

Subjects: economics and finance, industrial economics, regional economics, geography, economic geography, urban and regional studies, regional economics


Piet H. Pellenbarg, Leo J.G. van Wissen and Jouke van Dijk University of Groningen, The Netherlands 1. INTRODUCTION Due to changes in markets, consumer preferences, environmental regulations, technological progress and so on, firms are constantly adjusting to new situations. This process very often also has a spatial dimension. Characteristics of the spatial environment of a firm may change over time, but internal changes in addition may lead to other locational preferences. Firm migration is a particular form of locational adjustment. Here, we define it as a firm’s change of address from location A to location B. This definition is most suited for small and medium-sized single-plant firms, but less so for multiplant firms and large enterprises. A very simple case is that of a growing firm facing the problem that the present building is too small to host all its activities. Moving to another building is then an obvious solution. For large enterprises locational adjustment usually involves the restructuring of the spatial layout of activities that are spread out over multiple locations. These complex events can only partially be labelled as migration. Often, the migration component is but one element in a mix that also includes closing down, merging and splitting off business units of the enterprise. All these events are taken into account in a demographic approach to firm dynamics that has gained popularity in recent years (Van Dijk and Pellenbarg, 2000a). This approach, which is studied by geographers, sociologists and economists, is called, variously, industrial demography,...

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