Modelling the location decisions of manufacturing firms with a spatial point process approach

Abstract

The paper is devoted to explore how the increasing availability of spatial micro-data, jointly with the diffusion of GIS software, allows to exploit micro-econometric methods based on stochastic spatial point processes in order to understand the factors that may influence the location decisions of new firms. By using the knowledge of the geographical coordinates of the newborn firms, their spatial distribution is treated as a realization of an inhomogeneous marked point process in the continuous space and the effect of spatial-varying factors on the location decisions is evaluated by parametrically modelling the intensity of the process. The study is motivated by the real issue of analysing the birth process of small and medium manufacturing firms in Tuscany, an Italian region, and it shows that the location choices of the new Tuscan firms is influenced on the one hand by the availability of infrastructures and the level of accessibility, and on the other by the presence and the characteristics of the existing firms. Moreover, the effect of these factors varies with the size and the level of technology of the new firms. Besides the specific Tuscan result, the study shows the potentiality of the described micro-econometric approach for the analysis of the spatial dynamics of firms.

Keywords:

• firm demography
• spatial econometrics
• spatial heterogeneity
• multivariate point process
• georeferenced data

Disclosure statement

No potential conflict of interest was reported by the authors.