Firm relocation: state of the art and research prospects

Abstract

This paper deals with firm relocation. Firm relocation is a particular form of locational adjustment of the firm and one of the possible ways to adjust to changes in markets, preferences of consumers, environmental regulations, technological progress etc. In section 2 we will treat the neo-classical, the behavioural, and the institutional approaches respectively. Next, a historical review of firm relocation research is presented, in section 3. It starts with the "classical studies" of the first post-war period, followed by a description of what can be called the golden era of firm relocation studies according to the large number of studies: the nineteen sixties and seventies. This section ends with an overview of firm relocation studies of the last decades of the previous century. In section 4 we present an example an empirical study that addresses relevant firm relocation for the present era by means of a statistical model estimated on data for individual firms of the Netherlands. We conclude the chapter with a discussion of why and how the firm relocation research frontier can be pushed forward and give suggestions for further research also in relation with policy.