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Keywords:

  • Firms;
  • entrepreneurs;
  • relocation;
  • neighbourhood;
  • home-based businesses;
  • business property

ABSTRACT

The residential neighbourhood has become more important as a business environment as a result of economic and societal developments. However, some neighbourhoods are characterised by relatively high out-migration of firms; disadvantaged neighbourhoods in particular. This suggests that there may be factors at the neighbourhood level that steer relocation behaviour of local entrepreneurs. In this paper, we investigate how entrepreneurs valuate location aspects, including social and physical characteristics of the neighbourhood, and how this valuation relates to planned or actual firm relocation. The results show that the neighbourhood plays only a modest role for ‘being a (potentially) mobile firm’. Rather, relocation (propensity) results from growth ambition, and the most important reasons for both relocation and staying put are therefore the size and quality of the business premises itself or personal housing preferences. Policy aiming at retaining entrepreneurs in neighbourhoods is most successful if targeted at the supply of appropriate business space.