Exploring the role of the neighbourhood in firm relocation: differences between stayers and movers
B. Sleutjes & Pascal Beckers
#2011-064
This paper looks at the factors that influence an entrepreneur's
decision to stay or move out of a neighbourhood. In general, new and
relatively small firms tend to have a strong connection to their local
environment and hardly ever move across large distances. Aspects of the
building (e.g. size) are the most likely reason to move, but does the
neighbourhood itself matter as well?
We look to what extent neighbourhood aspects influence or have
influenced the decision to stay or move, both on the push and the pull
side. These aspects may be related to the local physical environment or
the safety situation, but also to the local social community.
We conducted in-depth semi-structured interviews with 40 entrepreneurs
from five urban neighbourhoods in the Netherlands. The sample is equally
divided between firms that stayed and firms that recently moved out of
the neighbourhood (20/20). The survey provides detailed information on
the characteristics and the performance of firms, as well as network
contacts, neighbourhood attachment, location choice, and the valuation
of location aspects. We make use of qualitative methods in order to
analyze our data.
Overall, we found that the reasons behind firm relocation propensity are
explained by a combination of the factors put forth in the neoclassical,
behavioural and, to a lesser extent, also the institutional strand of
literature. Costs, space, market and accessibility aspects are indeed
important reasons for both actual and planned relocation, but they
cannot be seen apart from other reasons relating to the entrepreneur as
an individual. What stands out is that in general, firms move because
firm-internal developments (growth) or, in the case of home-based
entrepreneurs, because changes in the household situation or housing
preferences make relocation necessary. Aspects of the weak neighbourhood
itself are only regarded as problematic, and consequently influence
relocation propensity, when these aspects directly affect firm
performance.
Keywords: urban residential neighbourhood, firm relocation,
neighbourhood characteristics
JEL codes: R23, R21