Firm relocation, suburbanization, and central city conditions: A disaggregated analysis

The decentralization of employment from central cities to the suburbs in U.S. metropolitan areas has been an active area of research in urban economics for many years. A key policy question has been whether the location and relocation decisions of firms are significantly influenced by state and local fiscal conditions. Unfortunately, many theoretical models used to assess these issues have been highly aggregated, using locations as the unit of analysis instead of firms themselves. In addition, the econometric models used have not clearly related to the theoretical issues, and data limitations have even further compromised the analyses. In an effort to lessen some of these problems, the dissertation utilizes a disaggregated analysis, based on a large database containing both firm-level information and detailed economic data for small geographic areas. The richness of the data, together with a naturally chosen theoretical/econometric model, increases the number of research questions that can be investigated, going beyond the usual emphasis placed upon assessing fiscal influences on firm location. The pattern of employment relocation in the Philadelphia metropolitan area is examined to illustrate the model. The construction of the database used in the analysis is discussed in a separate section. As of September 1, 1991, a version of this database is publicly available through the Wharton Real Estate Center at the University of Pennsylvania