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Modelling firm (re-)location choice in UrbanSim

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  • Balz R. Bodenmann

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    Abstract

    Over the last decade, low economic growth rates resulted in intensified competition between nations, regions, and towns in trying to attract new firms and inhabitants. In particular, the establishment of new firms has become one of the most vital objectives of governments and public authorities all over Europe. To raise the attractiveness of a region, different instruments have been used: tax reductions, incentives for new establishments, as business destination promotion activities, supply of outstanding infrastructure and public services. On the one hand, this paper investigates effects of different possible options for cantonal and municipal authorities’ intent to attract firms: improvements in transport infrastructure, designation of new building zones, and last but not least tax reductions. These actions have been tested by simulating the decisions of existing firms. The parameters for these simulations have been estimated with a discrete choice model using data of the cantons St.Gallen and both Appenzell as well as Zurich. On the other hand, the paper aims to provide an approach to implement these models in UrbanSim. UrbanSim is a software-based simulation system for supporting planning and analysis of urban development, incorporating the interactions between land use, transportation, the economy, and the environment. At the moment, UrbanSim is adapted to an European context (see the according research project SustainCity, www.sustaincity.eu).

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    Bibliographic Info

    Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa11p1091.

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    Date of creation: Sep 2011
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    Handle: RePEc:wiw:wiwrsa:ersa11p1091

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    1. Marcelo Lufin & Daisuke Nakamura, 2010. "Spatial social-networking externality and firm location: a simulation model of Chile," Documentos de Trabajo en Economia y Ciencia Regional 04, Universidad Catolica del Norte, Chile, Department of Economics, revised Nov 2010.
    2. Patrick Schirmer & Christof Zöllig & Kirill Müller & Balz Bodenmann & Kay Axhausen, 2011. "The Zurich case study of UrbanSim," ERSA conference papers ersa11p562, European Regional Science Association.
    3. Jed Kolko & David Neumark, 2009. "Do Some Enterprise Zones Create Jobs?," NBER Working Papers 15206, National Bureau of Economic Research, Inc.
    4. Devereux, Michael P. & Griffith, Rachel & Simpson, Helen, 2007. "Firm location decisions, regional grants and agglomeration externalities," Journal of Public Economics, Elsevier, vol. 91(3-4), pages 413-435, April.
    5. Neumark, David & Kolko, Jed, 2010. "Do enterprise zones create jobs? Evidence from California's enterprise zone program," Journal of Urban Economics, Elsevier, vol. 68(1), pages 1-19, July.
    6. Nathalie Picard & Constantinos Antoniou, 2011. "Econometric guidance for developing UrbanSim models. First lessons from the SustainCity project," ERSA conference papers ersa11p1494, European Regional Science Association.
    7. Siebert, Horst, 2000. "The paradigm of locational competition," Kiel Discussion Papers 367, Kiel Institute for the World Economy (IfW).
    8. Bierlaire, M. & Bolduc, D. & McFadden, D., 2008. "The estimation of generalized extreme value models from choice-based samples," Transportation Research Part B: Methodological, Elsevier, vol. 42(4), pages 381-394, May.
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