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Firm Size and Geographical Aggregation: An Empirical Appraisal in Industrial Location


  • Josep Maria Arauzo Carod


  • Miguel C. ManjÛn AntolÌn



This paper assesses empirically the importance of size discrimination and disaggregate data for deciding where to locate a start-up concern. We compare three econometric specifications using Catalan data: a multinomial logit with 4 and 41 alternatives (provinces and comarques, respectively) in which firm size is the main covariate; a conditional logit with 4 and 41 alternatives including attributes of the sites as well as size-site interactions; and a Poisson model on the comarques and the full spatial choice set (942 municipalities) with site-specific variables. Our results suggest that if these two issues are ignored, conclusions may be misleading. We provide evidence that large and small firms behave differently and conclude that Catalan firms tend to choose between comarques rather than between municipalities. Moreover, labour-intensive firms seem more likely to be located in the city of Barcelona.

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  • Josep Maria Arauzo Carod & Miguel C. ManjÛn AntolÌn, 2004. "Firm Size and Geographical Aggregation: An Empirical Appraisal in Industrial Location," Small Business Economics, Springer, vol. 22(3_4), pages 299-312, April.
  • Handle: RePEc:kap:sbusec:v:22:y:2004:i:3_4:p:299-312

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    Cited by:

    1. Liargovas, Panagiotis & Daskalopoulou, Irene, 2011. "Capital allocation in the Greek regions," Journal of Policy Modeling, Elsevier, vol. 33(6), pages 866-888.
    2. Josep-Maria Arauzo-Carod & Elisabet Viladecans-Marsal, 2009. "Industrial Location at the Intra-Metropolitan Level: The Role of Agglomeration Economies," Regional Studies, Taylor & Francis Journals, vol. 43(4), pages 545-558.
    3. Andrzej CieŚlik, 2013. "Determinants of the Location of Foreign Firms in P olish Regions: Does Firm Size Matter?," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 104(2), pages 175-193, April.
    4. Krenz, Astrid, 2016. "Firm structure and the location decision of German manufacturing firms: Evidence from official firm-level data," Center for European, Governance and Economic Development Research Discussion Papers 298, University of Goettingen, Department of Economics.
    5. Coll Martínez, Eva & Arauzo Carod, Josep Maria, 2015. "Creative Industries: a Preliminary Insight to their Location Determinants," Working Papers 2072/250133, Universitat Rovira i Virgili, Department of Economics.
    6. Josep Maria Arauzo Carod, 2005. "Determinants of industrial location: An application for Catalan municipalities," Papers in Regional Science, Wiley Blackwell, vol. 84(1), pages 105-120, March.
    7. Pablo Martí, Federico & Arauzo Carod, Josep Maria, 2010. "Spatial distribution of economic activities: an empirical approach usingself-organizing maps," Working Papers 2072/148482, Universitat Rovira i Virgili, Department of Economics.
    8. Chandra R. Bhat & Rajesh Paleti & Palvinder Singh, 2014. "A Spatial Multivariate Count Model For Firm Location Decisions," Journal of Regional Science, Wiley Blackwell, vol. 54(3), pages 462-502, June.
    9. Niklas Elert, 2014. "What determines entry? Evidence from Sweden," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(1), pages 55-92, August.
    10. Capelleras, Joan-Lluis & Mole, Kevin F., 2012. "How ‘buzz’ reduces uncertainty for new firm founders," MPRA Paper 38170, University Library of Munich, Germany.
    11. Gehringer, Agnieszka & Krenz, Astrid, 2014. "European market integration and the determinants of firm localization: The case of Poland," Center for European, Governance and Economic Development Research Discussion Papers 190, University of Goettingen, Department of Economics.
    12. Elisabet Viladecans Marsal & Josep Maria Arauzo Carod, "undated". "Industrial Location at the Intra-metropolitan Level: A Negative Binomial Approach," Studies on the Spanish Economy 224, FEDEA.
    13. Josep-Maria Arauzo-Carod, 2013. "Location Determinants of New Firms: Does Skill Level of Human Capital Really Matter?," Growth and Change, Wiley Blackwell, vol. 44(1), pages 118-148, March.
    14. Sara Cruz & Aurora A.C. Teixeira, 2014. "The determinants of spatial location of creative industries start-ups: Evidence from Portugal using a discrete choice model approach," FEP Working Papers 546, Universidade do Porto, Faculdade de Economia do Porto.
    15. Lambert, Dayton M. & Brown, Jason P. & Florax, Raymond J.G.M., 2010. "A two-step estimator for a spatial lag model of counts: Theory, small sample performance and an application," Regional Science and Urban Economics, Elsevier, vol. 40(4), pages 241-252, July.
    16. Miguel C. Manjon-Antolin & Josep Maria Arauzo-Carod, 2006. "Locations and Relocations: Modelling, Determinants, and Interrelations," ERSA conference papers ersa06p33, European Regional Science Association.
    17. Nadia Rocha, 2008. "Determinants of Firm Location: Empirical Evidence for France," IHEID Working Papers 08-2008, Economics Section, The Graduate Institute of International Studies.
    18. Miguel Manjón-Antolín & Josep-Maria Arauzo-Carod, 2011. "Locations and relocations: determinants, modelling, and interrelations," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 47(1), pages 131-146, August.
    19. Daniel Liviano & Josep-Maria Arauzo-Carod, 2013. "Industrial location and interpretation of zero counts," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 50(2), pages 515-534, April.
    20. Anil Rupasingha & Yongzheng Liu & Mark Partridge, 2015. "Rural Bound: Determinants of Metro to Non-Metro Migration in the United States," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(3), pages 680-700.
    21. Wu, Haoyi & Guo, Huanxiu & Zhang, Bing & Bu, Maoliang, 2017. "Westward movement of new polluting firms in China: Pollution reduction mandates and location choice," Journal of Comparative Economics, Elsevier, vol. 45(1), pages 119-138.
    22. Angel AlanÛn & Josep Maria Arauzo Carod, "undated". "Accessibility and Industrial Location. Some Evidence from Spain," Studies on the Spanish Economy 214, FEDEA.
    23. Liviano Solís, Daniel & Arauzo Carod, Josep Maria, 2011. "Industrial Location and Space: New Insights," Working Papers 2072/152137, Universitat Rovira i Virgili, Department of Economics.
    24. Lee, In Hyeock & Hong, Eunsuk & Sun, Laixiang, 2013. "Regional knowledge production and entrepreneurial firm creation: Spatial Dynamic Analyses," Journal of Business Research, Elsevier, vol. 66(10), pages 2106-2115.

    More about this item

    JEL classification:

    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)


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