Signilicance and motives of firm relocations in Germany

Abstract

"The choice of a location is of fundamental importance for a firm. Usually it is associated with Investments and relocation therefore linked with sunk costs. Theory and empirical studies suggest that it is especially young and expanding firms that relocate. This hypothesis is tested using a large and comprehensive database. It is shown that relocated firms are in fact more prosperous than those that do not move. They expand and employ highly qualified personnel more often and are distinctly younger than the vast majority of firms that have not relocated. Typically firms relocate over a short distance, so the relations to suppliers, customers and employees are not strongly affected. The majority of movements are from the centre to the suburban fringe, where sites are less expensive. However, centrality is often important for newly founded firms. Cities are ideal 'seedbeds' for firms to be founded, but as the firms grow older and wish to expand, an attractive hinterland becomes important. The areas surrounding towns and cities benefit directly from the in-migrating of young and aspiring firms. But the cities benefit, too, if attractive jobs and purchasing power remain in their vicinity." (Author's abstract, IAB-Doku) ((en))

Cite article

Brixy, U. (2011): Bedeutung und Beweggründe der Binnenverlagerungen von Betrieben in Deutschland. In: Zeitschrift für Wirtschaftsgeographie, Vol. 55, No. 3, p. 141-157.