FIRM LOCATION: FIRM COMPETENCES, FINANCIAL STRUCTURE AND REGIONAL DETERMINANTS

Abstract

This paper examines the choice of firms to locate in particular regions based on an expanded set of decision making determinants which takes into consideration firm profiles and competences, firm characteristics with particular emphasis on their financial structure and attractive regional factors focusing on knowledge. It combines intuitions from industrial economics, spatial analysis, corporate finance theory and strategic management to explore in greater depth the location of entrepreneurial activities at the sub-national level of regions, in particular between large urban areas and the periphery. Results suggest that the firm competences are conducive to their location and that other firm attributes contribute to this decision. When regional development and technological sophistication is taken into account, it is evidenced that they act as catalysts to the above decision, though only with respect to metropolitan regions where economies of scale could be exploited.