Determinants of location decisions - The creation of new establishments by French manufacturing and services firms
Location is increasingly seen as an essential component of firms' competitiveness. However, building a clear link between the choice of a particular location for a new establishment and the firm's performance represents a complex and uncertain exercise for decision-makers. Recent empirical works suggest that, faced with this uncertainty, managers tend to choose geographical areas about which they can easily gain knowledge that is both thorough and appropriate to their situation. This knowledge may come from the prior local presence of their firm, from the local presence of other similar firms or from their local social network. The empirical part of the research explores the way this preference for known places interacts in specific decision situations with economic and technical constraints. To this end, a questionnaire survey has been conducted on a large sample of French industrial and software companies in relation with location decisions they have taken in the 2001-2002 period, in France or abroad. The results obtained show these decisions as complex trade-offs between economic reasoning, personal preferences of the decision-makers, interests of various internal actors and pressures stemming from the social and economic environment of companies.