Destination choice for relocating firms: A discrete choice model for the St. Gallen region, Switzerland

Because of interdependence between resident population (e.g., as customers or manpower) and economic activities (e.g., shops or services), relocating firms' destination choice plays an important role in comprehensive land use models. However, due to a lack of data at the micro level enabling the estimation of discrete choice models, little research exists on this topic. In this paper, data from commercial registers of three Swiss cantons, St. Gallen, Appenzell Ausserrhoden, and Appenzell Innerrhoden, were analysed. This dataset provides information on more than 54,000 firms and autonomous plants from 1991 to 2006. Variables such as local taxes, governmental business friendliness, and accessibilities have been tested in a nested logit (NL) model for different business sectors. The results show that distance, local taxes, and cantonal business development strongly influence relocating firms' destination choice. Furthermore, significant differences between sectors can be identified. For instance, residents with graduate degrees have a significant and high impact on business services, but a minimal effect on businesses in wholesale trade and personal services.