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

Abstract

The existing literature on the spatial mobility of firms completely neglects the existence of inter-organizational relations (IORs). This is striking since there is a strong theoretical argument in the literature that firms with a high level of embeddedness in (localized) IORs are very 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 of this analysis show that embeddedness plays an important role as a determinant of the spatial behavior of firms. More specifically, there is a strong spatial lock-in effect of having a high degree centrality.