Ratio Working Paper No. 257Download
Our study provides evidence for rms’ evaluation of location quality. We use a 2004 survey of 6,000 East German rms that contained questions on the importance and assessment of 15 dierent location factors ranging from closeness to customers and suppliers, transport infrastructure, and proximity to research institutions and universities, as well as questions about the local nancial institutions and region’s image”. The results show (1) a great deal of heterogeneity in terms of which rm- or regional-level characteristics are important in the evaluation of a specic location factor, (2) that the model’s explanatory power is, overall, low and thus neither location characteristics nor internal factors are fully re ected in the perceptions, (3) that a rm’s business situation and whether a location factor is considered important have explanatory power for perception. One policy-relevant conclusion that we derive from these ndings is that location policy should consider rms’ perception of a specic location in addition to improving the actual attributes of that location.
Eickelpasch, A., Hirte, G. & Stephan, A. (2015). Firm’s Evaluation of Location Quality: Evidence from East Germany. Ratio Working Paper No. 257.