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Location Determinants of New Firms: Does Skill Level of Human Capital Really Matter?


  • This study was partially funded by SEJ2010-19088/ECON, SEJ2010-16934/ECON, the “Xarxa de Referència d'R+D+I en Economia i Polítiques Públiques,” the SGR programme (2009-SGR-322) of the Catalan Government, and the PGIR programme (N-2008PGIR/05) of Rovira i Virgili University. This article has benefited from discussions with Á. Alañón, D. Liviano and M. Manjón. I am grateful to seminar participants at “Regional Competitiveness and International Factor Movements” (INFER & LEO—Université d'Orléans, 2011). Any errors are, of course, my own.


This paper is about the role played by the stock of human capital on location decisions of new manufacturing plants. I analyse the effect of several skill levels (from basic school to PhD) on decisions about the location of plants in various industries and, therefore, of different technological levels. I also test whether spatial aggregation level biases the results and determines the most appropriate areas to be considered in the analyses of these phenomena. My main statistical source is the Register of Manufacturing Establishments of Catalonia, which has plant-level microdata on the locations of new manufacturing plants.