Human capital as a location factor: an empirical investigation of relocating firms and their labour force in the Netherlands

This paper examines the role of human capital as a location factor in the context of long-distance firm relocations. Using rich register data on single-plant firms in the Netherlands 2006-2011, the paper enquires into whether relocation is motivated by the wish to improve the access to employees and the quality of labour force. Not disrupting existing spatial relationships is a prominent consideration of relocating firms, yet in general relocation does not result in a better spatial match. Some evidence is found for firm-specific human capital functioning as a keep factor. Relocating firms retain predominantly highly skilled employees, but general human capital itself does function neither as a keep factor nor as a pull factor