European Corporate Location: The Choice Between Cities

The service sector has been the major generator of demand for office space. With globalisation, there has been increased competition between countries to attract businesses. Some countries, like Ireland, encourage this by tax incentives. Despite being the most expensive location in Europe in terms of office space and labour force, London still attracts many corporate occupiers. Northern European countries, likewise, are attractive for service sector businesses through their advanced infrastructure facilities and highly skilled workers. None of these issues, however, is sufficient on its own to determine why a city becomes attractive for businesses. This paper adopts a comparative approach for assessing the underlying reasons for corporate location choice combining the factors stated above, as well as exploring factors including economic and political stability, cost of living, office supply and office lease structures. The aim is to produce a ìcorporate friendliness matrixî and to test it against the presence of businesses in a certain location. The cities considered in this study are the ìservice sector capitalsî of Europe in terms of economic output.