Firm relocation and site selection in suburban municipalities

This paper develops a model of the site choice decision of relocating firms in seven single-digit SIC industries. Hypotheses are tested using data on firms which have moved from Milwaukee City to its suburbs between 1964 and 1974. The industries considered are: construction; manufacturing; transportation, communications, and public utilities; wholesale trade; retail trade; finance, insurance and real estate; and services. While this problem has been examined for manufacturing with limited success, the results here are encouraging. The results show that agglomeration economies and an available labor force are important influences in the site choice among suburban locations for firms in all industries. Fiscal variables are at best only of secondary significance in the choice among suburban municipalities.