Real Estate Determinants of Firm Relocation in Urban Residential Neighbourhoods

Real estate factors, such as property ownership, size and age, are generally not accounted for in research on revealed relocation decisions of firms. This is remarkable, as entrepreneurs often suggest that real estate characteristics at the property level provide an explanation for firm relocation behaviour in addition to more-frequently tested drivers of firm relocation. We assess the role of real estate determinants, focusing on firms in urban residential neighbourhoods, differentiating between firms located in residential and commercial properties. We find that property ownership is negatively related to relocation likelihood, while being located in property with multiple users is positively related to relocation likelihood. For firms in residential properties high property age and large property size limits firm relocation. Our findings confirm that real estate characteristics are important determinants for relocation likelihood of firms, suggesting that the structure of neighbourhood housing stocks can be linked to the mobility pattern of local firms.