| The location choice is the first step in the development process of an enterprise,and it is crucial to the survival and development of them.The manufacturing industry is the main driving force for China’s economic growth,and the Yangtze River Delta also has an important strategic position in China’s economic and social development process.As an important manufacturing base in China,the manufacturing industry in the Yangtze River Delta is characterized by diverse categories and complete industrial chains.The distribution and concentration of different manufacturing industries are also varied.This makes it possible to study the influence mechanism on location choice of heterogeneous firms.Previous literatures pay more attention on the impact of firm heterogeneity on FDI choices at the country level.They didn’t examine the combined effects of firm’s characteristics and location factors.The purpose of this study is to examine how the firm’s characteristics affect firm’s location choice in the Yangtze River Delta of China.This paper selects 27 prefecture-level cities in the Yangtze River Delta as the candidate cities,based on the firm’s area code and address,the database of new manufacturing firms in the central group of the Yangtze River Delta is matched with city-level data.First,the conditional logit model is used for sub-sample regression.Then performs mixed logit model to study the role of the location factors(labor cost,land cost,infrastructure and urbanization economy,local economy,policy factors and the degree of openness)and firm’s characteristics(firm size,the types of ownership and industry attributes)of the location choice of new manufacturing firms at the city level in the Yangtze River Delta from 2005 to 2013.The empirical results confirm that location factors,as well as the firm’s characteristics,play important roles in the firm’s location choice.This study confirms the diverse effects of firm’s characteristics on location choice at the city level specifically.Location factors have been proven to influence the firm’s location decision,these impacts would be adjusted to a certain degree or even change direction when the firm’s characteristics are taken into consideration.The research shows that the role of location factors is different among different samples of firms.The improvement of the degree of openness is more attractive to the location choice of high-tech firms,foreign-invested firms and large firms.For labor-intensive firms,the increase of labor cost hinders the location choice of firms,but for high-tech firms and capital-intensive firms,the role of labor cost is not obvious.At the same time,because the firms themselves needs fewer labor forces,the increase of labor cost has little impact on micro-firms.The effects of firms’ characteristics on location choice vary.With the increase of the number of employees,new manufacturing firms tend to choose middle-level cities and are less likely to choose sites in developed cities with fierce competition.State-owned ownership has no significant influence on the location choice of firms,while foreign-invested firms tend to choose more developed cities and locations with high concentrations of foreign manufacturing firms.Similar to foreign-invested firms,high-tech firms are also more likely to be geographically clustered to form interconnected and mutually supportive enterprise groups.This paper provides a deeper insight into new manufacturing firms’ location choices at the city level.A better understanding of the effects of firm’s characteristics on location choices can help policymakers put forward more comprehensive policies given the specific preferences of firms with different characteristics. |
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