The determinants of location choice: Single plants versus multi-plants

Abstract

This paper adopts a count data model to explore the distinction between single plant and multi-plant location choices. It is hypothesized that start-up location decisions would be determined by supply variables (land, labour and capital costs, workforce and technological characteristics); demand variables (market size and market accessibility) and agglomeration economies. We use plant data and focus on location choices within Portuguese municipalities. Our research shows that new multi-plants are particularly sensitive to urbanization economies, land costs and the size of the local market, while new single plants are more responsive to labour costs, both localization and urbanization economies and accessibility to main markets.