University of Groningen Firm relocation and regional policy Mariotti, Ilaria IMPORTANT NOTE: You are advised to consult the publisher's version (publisher's PDF) if you wish to cite from it. Please check the document version below. Document Version Publisher's PDF, also known as Version of record Publication date: 2005 Link to publication in University of Groningen/UMCG research database Citation for published version (APA): Mariotti, I. (2005). Firm relocation and regional policy: A focus on Italy, the Netherlands and the United Kingdom s.n. Copyright Other than for strictly personal use, it is not permitted to download or to forward/distribute the text or part of it without the consent of the author(s) and/or copyright holder(s), unless the work is under an open content license (like Creative Commons). Take-down policy If you believe that this document breaches copyright please contact us providing details, and we will remove access to the work immediately and investigate your claim. Downloaded from the University of Groningen/UMCG research database (Pure): http://www.rug.nl/research/portal. For technical reasons the number of authors shown on this cover page is limited to 10 maximum. Download date: 22-01-2018
Firm relocation and regional policy
Nederlands Geografische Studies / Netherlands Geographical Studies Redactie / Editorial Board Drs. J.G. Borchert (Editor in Chief) Prof.Dr. J.M.M. van Amersfoort Dr. H.J.A. Berendsen Dr. P.C.J. Druijven Prof.Dr. A.O. Kouwenhoven Prof.Dr. H. Scholten Plaatselijke Redacteuren / Local Editors Drs. R. van Melik, Faculteit Geowetenschappen Universiteit Utrecht Dr. D.H. Drenth, Faculteit Beleidswetenschappen Katholieke Universiteit Nijmegen Dr. P.C.J. Druijven, Faculteit der Ruimtelijke Wetenschappen, Rijksuniversiteit Groningen Drs. F.L.P.M. Kwaad, Fysisch-Geografisch en Bodemkundig laboratorium Universiteit van Amsterdam Dr. L. van der Laan, Economisch-Geografisch Instituut Erasmus Universiteit Rotterdam Dr. J.A. van der Schee, Centrum voor Educatieve Geografie Vrije Universiteit Amsterdam Dr. F. Thissen, Instituut voor Sociale Geografie Universiteit van Amsterdam Redactie-Adviseurs / Editorial Advisory Board Prof.Dr. G.J. Ashworth, Prof.Dr. P.G.E.F. Augustinus, Prof.Dr. G.J. Borger, Prof.Dr. K. Bouwer, Prof.Dr. J. Buursink, Dr. C. Cortie, Dr. J. Floor, Prof.Dr. G.A. Hoekveld, Dr. A.C. Imeson, Prof.Dr. J.M.G. Kleinpenning, Dr. W.J. Meester, Prof.Dr. F.J. Ormeling, Prof.Dr. H.F.L. Ottens, Dr. J. Sevink, Dr. W.F. Sleegers, T.Z. Smit, Drs. P.J.M. van Steen, Dr. J.J. Sterkenburg, Drs. H.A.W. van Vianen, Prof.Dr. J. van Weesep ISSN 0169-4839
Netherlands Geographical Studies 331 Firm relocation and regional policy A focus on Italy, the Netherlands and the United Kingdom Ilaria Mariotti Utrecht/Groningen 2005 Royal Dutch Geographical Society / Department of Spatial Sciences University of Groningen
Deze publicatie werd verdedigd als academisch proefschrift aan de Rijksuniversiteit Groningen op 30 juni 2005 Promotor: Beoordelingscommissie: Prof. dr. P.H. Pellenbarg Prof. dr. J. van Dijk Prof. dr. L.G.J. van Wissen Prof. dr. O.A.L.C. Atzema ISBN 90-6809-371-1 Copyright Faculteit der Ruimtelijke Wetenschappen, Rijksuniversiteit Groningen, 2005 Niets uit deze uitgave mag worden vermenigvuldigd en/of openbaar gemaakt door middel van druk, fotokopie of op welke andere wijze dan ook zonder voorafgaande schriftelijke toestemming van de uitgevers All rights reserved. No part of this publication may be reproduced in any forms, by print or photoprint, microfilm or any other means, without written permissen by the publishers. Gedrukt door het Grafisch Centrum, Rijksuniversiteit Groningen Voorkant: pentekening K.D. Schönfeld
CONTENTS Figures 8 Tables 9 1 Introduction 13 1.1 The research problem 13 1.1.1 Defining firm relocation 14 1.2 Objective, research questions and hypotheses 16 1.2.1 Objective 16 1.2.2 Research questions and hypotheses 19 1.3 Scientific and social relevance 21 1.4 Research design 22 1.4.1 Methodology 22 1.4.2 Overview of the chapters 24 2 Theoretical framework 26 2.1 Introduction 26 2.2 The neoclassical approach 26 2.3 The behavioural approach 28 2.4 The institutional approach 30 2.5 The evolutionary approach 31 2.6 Comparison and conclusions 32 3 Regional policies and their impact on firm relocation: an overview 36 3.1 Introduction 36 3.2 The traditional approach 37 3.3 The contemporary approach 40 3.4 The influence of EU competition, structural and cohesion 43 policies on national policies 3.5 Conclusions 44 4 Firm relocation: a survey 48 4.1 Introduction 48 4.2 From 1945 to the 1970s 48 4.2.1 Industrial decentralisation 50 4.2.2 Industrial suburbanisation 51 4.3 From the 1980s to the present 52 5
4.3.1 Intra-regional moves 53 4.3.2 International moves 54 4.3.3 New research interests 55 4.4 Conclusions 57 5 Firm relocation at country level: Italy, the Netherlands and the United Kingdom 59 5.1 Introduction 59 5.2 The business registration system 59 5.2.1 Italy 59 5.2.2 The Netherlands 62 5.2.3 The United Kingdom 64 5.3 Firm relocation databases 66 5.4 Firm relocation in the three countries in 1990-2000s 67 5.4.1 Italy 68 5.4.2 The Netherlands 72 5.4.3 The United Kingdom 77 5.5 Comparison and conclusions 82 6 Regional policy measures and their impact on firm relocation: the cases of Italy, the Netherlands and the United Kingdom 88 6.1 Introduction 88 6.2 Italy 90 6.2.1 Regional policy measures and firm relocation in 1945-1980s 90 6.2.2 Regional policy measures and firm relocation in 1990-2000s 93 6.2.3 A focus on the Area Contract 100 6.3 The Netherlands 105 6.3.1 Regional policy measures and firm relocation in 1945-1980s 106 6.3.2 Regional policy measures and firm relocation in 1990-2000s 114 6.3.3 A focus on the IPR premium 119 6.4 The United Kingdom 128 6.4.1 Regional policy measures and firm relocation in 1945-1980s 129 6.4.2 Regional policy measures and firm relocation in 1990-2000s 135 6.4.3 A focus on the Regional Selective Assistance 142 6.5 Summary and concluding remarks 145 7 Core-periphery relocation in Italy, the Netherlands and the United Kingdom. A firm level investigation 154 7.1 Introduction 154 6
7.2 The relocation of Italian firms from the centre-north to the 155 Mezzogiorno and the role of the Area Contract 7.2.1 Descriptive statistics 155 7.2.2 Other elements on the relocation process 165 7.2.3 Conclusions for the Italian case 168 7.3 The relocation of Dutch firms from the Randstad to the Northern 169 provinces and the role of the IPR premium 7.3.1 Descriptive statistics 169 7.3.2 Other elements on the relocation process 174 7.3.3 Conclusions for the Dutch case 177 7.4 The relocation of British firms from the South East to the 177 periphery and the role of the RSA measure 7.4.1 Descriptive statistics 177 7.4.2 Other elements on the relocation process 185 7.4.3 Conclusions for the British case 186 7.5 Conclusions 187 8 Cross-border delocalisation 191 8.1 Introduction 191 8.2 Firm internationalisation strategies 192 8.3 Cross-border delocalisation: the case of Italy 195 8.4 Cross-border delocalisation: the case of the Netherlands 200 8.5 The impact of international delocalisation on the home country: 206 cross-border delocalisation versus core-periphery relocation 8.6 Conclusions 209 9 Summary and conclusions 212 9.1 Summary 212 9.1.1 Introduction 212 9.1.2 The theoretical approaches 212 9.1.3 Firm relocation studies and regional policies 213 9.1.4 Firm relocation in Italy, the Netherlands and the United 214 Kingdom 9.1.5 Core-periphery relocation in Italy, the Netherlands and the 215 United Kingdom and the role of regional policies 9.1.6 Cross-border delocalisation 217 9.2 Conclusions 218 9.2 1 Trends for regional policies 219 9.2.2 Further research 220 7
Samenvatting 221 Bibliography 229 Appendices 248 Acknowledgement 277 FIGURES 1.1 Types of firm relocation 15 1.2 The core are and the periphery in Italy 17 1.3 The core are and the periphery in the Netherlands 17 1.4 The core are and the periphery in the United Kingdom 18 5.1, 5.2 Net firm migration in Italy in 1999 and sectoral patterns 69 5.3 Firm migration in the Netherlands, 1986-1995 72 5.4, 5.5 Interprovincial firm migration 1990-91 and 1994-95 73 5.6 Manufacturing firm migrations with more than 10 employees per 76 COROP region in 2001 5.7 Total volume of company relocations in the UK, 1988-1999 77 5.8, 5.9 Net firm migration in the United Kingdom and destination of 79 investments from the South East (1988-1999) 5.10 Origin of investments towards the South-East (1988-1999) 80 5.11 Net job migration in 1988-1999 80 6.1 Manufacturing Initiatives in the Mezzogiorno subsidised by Law 96 488 (1996-2002) 6.2 Geographical distribution of Contratti d area and Protocolli 101 aggiuntivi 6.3 Area coverage of studies on the volume and type of movement, 105 1950-1980 6.4 Policy coverage in 1952-1958 109 6.5 Policy coverage in 1969-1972 109 6.6 Policy coverage in 1978-1981 110 6.7 Policy coverage in 1982-1985 110 6.8 Area coverage of studies on the volume and type of movement, 113 1950-1980 6.9 The municipalities in the Northern Netherlands and their prospects 121 with regard to IPR 6.10 Geographical distribution of the Decentralised IPR projects in the Northern provinces 123 8
6.11 Geographical distribution of the Decentralised IPR projects by 123 average investment ( 000) 6.12 Geographical distribution of the project investments New plants 124 6.13 Geographical distribution of the project investments Expansions 125 6.14 Investment volume per job created 127 6.15 Manufacturing movement to the peripheral area from the Southeast 133 8.1 Countries in Central and Eastern Europe receiving Italian and 192 Dutch investments 8.2 The industrial districts under survey 198 8.3 Transfer of production capacity within two years 203 8.4 Takeover of R&D by low-wage countries 203 TABLES 2.1 Relocation approaches and determinants 33 3.1 Traditional and contemporary regional policies: a comparison 45 5.1 The Business Registration Systems 61 5.2 Code system of balance of change 63 5.3 Enterprises and self-employment on and off the IDBR (millions) 65 5.4 The Mutation Balance and the CREDO databases 67 5.5 Head office relocation in 1999 by sectors 70 5.6 Inward and outward moves of branch plants and the concomitant 251 employment 5.7 Branch plants and related employment in the Mezzogiorno 252 belonging to firms from the Centre-North. Origin and destination of investments per region 5.8 Branch plants and related employment in the Mezzogiorno 253 belonging to firms from the Centre-North. Origin of investments per region by sector 5.9 Branch plants and related employment in the Mezzogiorno 254 belonging to firms from the Centre-North. Destination of investments per region by sector 5.10 Firm migration in the period 1986-1995 72 5.11 Firm mobility in the Netherlands in 1995 74 5.12 Southeast out - and in - migration at the regional level, 1988-1999 79 (number of firms moved) 5.13 Firms, jobs and average jobs per move in the Southeast, 1988-1999 81 5.14 Business moves by sector, 1988-1999 81 9
5.15 Industrial mobility by sector (percentage) 84 6.1 Regional policy measures in the EU Member States 89 6.2 Number of firms with more than 20 employees and employment in 92 1977, by ownership type 6.3 Number of new plants with over 1,000 employees according to 92 type of ownership in the Mezzogiorno 6.4 Law 488/1992 95 6.5 Investment projects subsidised by Law 488/92 in the period 1996-95 2002 6.6 Industrial investment projects in the Mezzogiorno by Centre- Northern firms - Law 488/92 (from 1996 to the beginning of 2002) 96 6.7 Geographical distribution of centre-northern manufacturing 255 projects that have been granted by Law 488 to invest in the Mezzogiorno regions of origin and destination 6.8 Sectoral distribution of centre-northern manufacturing projects that 256 have been granted by Law 488 to invest in the Mezzogiorno regions of destination (absolute value) 6.9 The measures of the Negotiated Plans 98 6.10 Program Contracts approved between 1986 and 2001 by centrenorthern 99 and foreign firms 6.11 Area Contracts concerning de-industrialised areas where Stateowned 102 enterprises were located 6.12 Investment projects subsidised by the Area Contract and Protocolli 102 aggiuntivi (at 31-12-2003) 6.13 Origin of the AC-granted investments 104 6.14 Decentralisation of manufacturing plants, with more than 10 112 employees, from the west to the three other parts of the country in 1950-62 6.15 Government budget for spatial economic policy, 2000-2006 115 6.16 The NOM Development Agency 118 6.17 Approved investment projects in the northern provinces, 2000-2002 119 6.18 Geographical distribution of investment projects subsidised by the 121 Centralised IPR (1997-2002) 6.19 Investment projects subsidised by the Decentralised IPR (1993-123 1999 and 2000-2003) 6.20 Geographical distribution of the Decentralised IPR projects ( mln) 123 6.21 Sectorial distribution of the Decentralised IPR projects (new plants 126 and enlargements) 6.22 Bureau Louter classification 257 10
6.23 Number of new full-time jobs involved in the projects by sector 126 6.24 Investment origin of a selected sample of 195 cases 127 6.25 Investment amount of a selected sample of 195 cases ( 000) by 127 origin 6.26 Measures of the Regional Industrial Assistance 131 6.27 Total government funding for Regional Development Agencies ( 138 million) 6.28 Expenditure on regional preferential assistance to industry in Great 139 Britain, 1984-94 6.29 Appraisal criteria of the Regional Selective Assistance and the 140 Enterprise Grant 6.30 Approved projects in 1991-1995 143 6.31 Number of projects and grant offered by project type 143 6.32 RSA applications by location of ownership 144 6.33 RSA offers by type of Assisted Areas in 1991-1995 144 6.34 Grant awarded by region and county 144 6.35 The components of regional policy in Italy, the Netherlands and the 147 United Kingdom 6.36 Regional incentive types in the three countries 147 6.37 Firm relocation and regional policy in Italy, the Netherlands and 150 the United Kingdom (1945-2000s) 7.1 Geographical distribution of the AC-granted projects 276 7.2 Origin of the investments 156 7.3 Investment size (by Area Contract) 276 7.4 Motivations to relocate (pull factors) 158 7.5 What would have happened to the project if AC grant had not been 158 awarded 7.6 Obstacles to investment location 159 7.7 Pull factors 161 7.8 Component Score Coefficient Matrix 161 7.9 Total variance explained (2 components) 162 7.10 Total variance explained (3 components) 162 7.11 Number of Cases in each Cluster 162 7.12 Final Cluster Centres 162 7.13 Geographical distribution of firms by clusters 164 7.14 Leading participants in the relocation process to the Mezzogiorno 165 11
7.15 Expenditure for the per-capita development (average 1999-2000, 167 ) 7.16 Origin of IPR-granted firms that have invested in the northern 170 provinces 7.17 Motivations to relocate (pull factors) for IPR-granted firms 171 7.18 What would have happened to the project if IPR grant had not been 171 awarded 7.19 Ten highest rated towns in the Northern Netherlands in 1997, by 173 location area of the respondents 7.20 Geographical distribution of RSA-granted projects 179 7.21 Country of ownership 179 7.22 The influence of RSA on investment decisions 180 7.23 Nature of competitive advantage of the RSA project over other 181 suppliers 7.24 What would have happened to the project if RSA grant had not 182 been awarded 7.25 Characteristics of additionality of sample projects by project size 182 (% of grants) 7.26 Other locations that could have been chosen for the project 184 7.27 Other locations that were considered for the project 184 8.1 Internationalisation strategies 193 8.2 Internationalisation strategies of Italian firms (%) 195 8.3 Internationalisation strategies of the district SMEs (%) 196 8.4 District SMEs that acquire and sell in subcontracting 196 8.5 Activities that have been relocated to the SEECs (%) 199 8.6 Motivations to delocalise (%) 199 8.7 Countries of location 201 8.8 Internationalisation strategies of Dutch firms 205 9.1 Conclusions and accepted hypotheses 219 12