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Firm Locational Decisions: A Qualitative Choice Analysis

Author

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  • Petrulis, M. F.

Abstract

A multinomial logit analysis was used to explain firm locational decisions in selected electrical machinery industries. Such information can be invaluable to policymakers concerned with rural development decisions. The results indicate that the probability of closure or new start increases if the establishment is a small, multi-unit operation; the probability of contraction increases if the establishment is a large, single-unit operation. The study also shows that demand conditions, local wage rates, construction costs, and the opportunity cost of capital affect the probability of establishment starts, relocations, and expansions and contractions. Business taxes are not important.

Suggested Citation

  • Petrulis, M. F., 1983. "Firm Locational Decisions: A Qualitative Choice Analysis," Staff Reports 316801, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uerssr:316801
    DOI: 10.22004/ag.econ.316801
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