Search

Business location research often focuses on evaluating specific policies or explaining outcomes for a particular region. Further, the micro-foundations of random profit maximization supporting manufacturing location analysis often lack the intuitive nature of demand thresholds. While this article maintains these micro-foundations, it introduces a unifying concept of profit pools and examines how proximate supply/cost factors determine potential local manufacturing size. The approach avoids a number of limitations associated with other locational choice models. Restricted-access establishment-level data from the Longitudinal Business Database along with secondary data sources produce a model to estimate county-level contributors to outcomes of manufacturing establishment growth and consolidation. The analysis offers improved methods and accuracy for modeling establishment location outcomes, including accuracy in measuring industry size and methods for choosing among various count data distributions. The locational factors associated with county-level potential for manufacturing vary in magnitude and significance depending on the type of manufacturing, while affirming the importance of agglomeration across manufacturing types.

The goal of this study is to quantitatively examine the relationship between walkability and arts-related businesses in metropolitan areas across the United States. Model results indicate that the relationship between arts businesses and walkability is sensitive to the size or scale of the business considered, as well as to the definition of the arts used. Larger-scale businesses are somewhat more likely to locate in walkable neighborhoods than are small-scale arts-related businesses, which are less likely to locate in walkable neighborhoods. This difference is likely due to the higher cost of property in these neighborhoods. In this regard, community-level economic development and planning entities need to take proactive measures to ameliorate the cost externalities associated with modifications to urban environments to make them more walkable.

Inner city revitalization efforts centered on fostering new business activity are controversial because they assume that the job creating capacity of new businesses is capable of impacting aggregate employment levels in inner city neighborhoods. Given this controversy, this article examines the link between new business activity and inner city employment growth in Phoenix, Arizona. Analytical results highlight job creation from new business activity but a net negative association between new business activity and employment growth stemming from the loss of jobs from large employers in inner city neighborhoods. This relationship highlights that encouraging new business activity is not necessarily a bad idea for local residents and customers, but should not be viewed as a panacea for all inner city problems. Instead, new business activity should be viewed as one component of multifaceted initiatives to revitalize inner city neighborhoods.

This article simulates job and fiscal impacts of the Michigan Economic Growth Authority’s tax credit program for job creation, commonly called “MEGA.” Under plausible assumptions about how such credits affect business location decisions, the net costs per job created of the MEGA program are simulated to be of modest size. The job creation impacts of MEGA are simulated to be considerably larger than devoting similar dollar resources to general business tax cuts. The simulation methodology developed here is applicable to incentives in other states.

Medical device firms, like firms in the high-technology sector, often include business functions characteristic of both the industrial economy and the knowledge economy. Thus, it is not immediately clear which kinds of locational attributes (i.e., traditional cost-based factors or those concerned with attracting and retaining knowledge workers) are most influential in the site selection process. This study draws on survey data from 48 medical device firms in Massachusetts, a state with one of the largest clusters in the industry, to examine the relative importance of various factors and conditions in the location decision. A second objective is to consider the extent to which the rating of a given location factor varies depending on whether the firm maintains manufacturing facilities in the state. The implications of the findings for both location theory and economic development efforts are discussed.

The major source of change in the tourism industry of New London County, Connecticut, over the past one and a half decades has been the dramatic influx of visitors to the county's two American Indian casinos: Foxwoods, opened in 1992, and Mohegan Sun, opened in 1996. This study seeks reasonable estimates of municipal-level revenues and expenditures related to tourism growth during 1993–2002, for each of the 21 municipalities in the county. The authors conduct an econometric analysis to separate three factors with different spatial impacts on revenues and expenditures: those due to the residential locations of new tourism employees, those due to the business location of new tourism enterprises and those due to the pattern of increased traffic caused by new visitor travel.

Since the 1980s, rural communities have embraced prisons as a tool for economic development following the decline in resource-based industry in rural areas. Although there are economic benefits from prisons, the drawback is that for small rural communities, prisons change the demographic composition of the communities' residents and, as portrayed by Census Bureau data, make them unattractive locations for industry. The inmate population affects factors such as high poverty rate, lower educational achievement, and low per capita income. This article suggests that rural communities should take proactive measures to change this image by providing a methodology for reanalyzing census data to portray their “true” image to potential investors.

The use of local economic development incentives within a metropolitan area has undergone less analysis than incentives that attempt to alter interregional business location decisions. This is unfortunate because other factors that influence where business resides are constant across cities in a metropolitan area, and a properly used incentive is more likely to alter a business location decision. To comment on these issues, the authors use a simultaneous equation model to conduct regression analyses of panel data from 112 cities in the Detroit metropolitan area. They find that only certain forms of local incentives, at certain times, exert the expected positive influence on the local value of commercial and manufacturing property. The findings are tied to issues related to the redistribution of economic activity from the core to the periphery in U.S. metropolitan areas, and the authors conclude with policy suggestions on the future use of local incentives.

The locations and profiles of firms in the six-county Chicago, Illinois, region were used to compare the businesses’ proximities to freeway ramps and transit stations for two time periods: 1981 and 1999. A series of regression models was constructed to assess whether the location patterns with respect to transportation facilities have changed over the last two decades. The data suggest that, controlling for exogenous factors, businesses have moved closer to freeway ramps in the last two decades. Meanwhile, the distance to transit stations has not changed except in the city of Chicago, where it has decreased. These findings suggest shifts in location choice behaviors in the urban core and the suburbs. Specifically, firms in the urban core areas are valuing access to rail stations to a greater degree, whereas those in the suburbs are placing more importance on proximity to freeway ramps. The concentration of businesses near expressway ramps in the inner and middle suburbs suggests the emergence of a pattern in those areas that corresponds to a polycentric development, with freeway ramps as the focal points. Finally, the findings indicate a shift, not a decrease, in the importance of transportation access for business location choice.

Travel-stimulated entrepreneurial migration involves the movement of existing and potential businesses to a region by entrepreneurs who first visited it while on pleasure or business travel. The incidence of travel-stimulated entrepreneurship is examined within the Greater Yellowstone Ecosystem. These pleasure and business travel-stimulated entrepreneurs are compared with native-Montana entrepreneurs regarding types of businesses they operate and their business location values. The findings indicate that travel-stimulated entrepreneurial migration contributes to business formation and diversity of firms competing in the Greater Yellowstone Ecosystem. The concept of travel-stimulated entrepreneurial migration is discussed with respect to conversion studies, economic impact models, and the tourism destination life-cycle model.

Selecting a business location is among the most important strategic decisions for family firms. Yet the separate demands of the family and the business often prove difficult to balance. A comparison of location preferences in family and nonfamily firms provides insight into the family influence on strategic decision making.

The effect of enterprise zone incentives on business location decisions has been actively debated in academic, political, and program practitioner circles. This essay concludes that financial incentives, such as tax refunds, credits, and abatements, that are offered to new businesses through enterprise zone programs only marginally affect the firm's location decision and are not a major location factor Enterprise zones generally do not fare well in classical and nontraditional location factors causing enterprise zone incentives to be unable to offset the deficiencies of major location factors in zones. Whether the enterprise zone incentives can be a pivotal factor in the location decision is highly dependent on the percentage of the financial incentive to the initial investment of the new firm.