Ties that Spatially Bind? A Relational Account of the Causes of Spatial Firm Mobility

Abstract

The existing literature on the spatial mobility of firms neglects inter-organizational relations. This is striking since there is a strong theoretical argument that firms with a high level of (localized) embeddedness are unlikely to relocate. Therefore, the following research question is posed: To what extent is the level of embeddedness of firms in (localized) innovative inter-organizational relationships of influence on their propensity to relocate? Based on data from the automation service sector, an ordered logit model is estimated. The results show that embeddedness is an important determinant of spatial firm mobility. More specifically, there is a strong spatial lock-in effect of having a high degree of centrality.