Browse > Article

The Effect of Location Satisfaction of Innovative Start-ups on the Intention of Relocation: Focusing on Capital and Non-Capital Areas  

Choi, Jongmin (Department of Public Administration at Keimyung University)
Publication Information
Asia-Pacific Journal of Business Venturing and Entrepreneurship / v.16, no.6, 2021 , pp. 57-68 More about this Journal
Abstract
The purpose of this study is to investigate the effect of location satisfaction of innovative start-ups, located in capital and non-capital areas, on the intention of relocation. The analysis was based on the data of a survey of 231 innovative start-ups that were founded less than 7 years ago. 10 factors related to the aspects of business management, network building, and business environment were considered as location satisfaction of start-ups. The dependent variable was whether innovative start-ups plan to relocate. First, it was confirmed that in the case of innovative start-ups in capital area, the intention to relocate was found to decrease when the location satisfactions related to the promptly provision of products and services to consumers and ease of supplying labor were increased. Second, in the case of innovative start-ups in non-capital area, it was found that the intention to relocate was found to decrease when the location satisfactions related to creating a network, convenient transportation and free and creative start-up environment were increased. In addition, it was found that the higher the sales of start-ups in non-capital area, the lower their intention to relocate while the higher firm age of start-ups in non-capital area, the higher their intention to relocate. This study has an academic contribution to examining the relationship between between the location satisfactions of start-ups and the intention to relocate, which has been rarely addressed in Korea, and to shedding light on the difference in capital and non-capital areas. Furthermore, this study has policy implications since it suggests factors that the government should consider for geographical agglomeration of start-ups.
Keywords
start-up; relocation; location; satisfaction;
Citations & Related Records
연도 인용수 순위
  • Reference
1 Lee, M. J., & Joo., Y. J.(2019). The Effect of Technology-Based Entrepreneurship(TBE) Activities on Firms Growth, Asia-Pacific Journal of Business Venturing and Entrepreneurship, 14(6), 59-76.
2 Sridhar, K. S., & Wan, G.(2010). Firm location choice in cities: Evidence from China, India, and Brazil. China Economic Review, 21(1), 113-122.   DOI
3 Storper, M., & Salais, R.(1997). Worlds of Production: the action frameworks of the economy, Harvard University Press.
4 Stuart, T., & Sorenson, O.(2003). The geography of opportunity: spatial heterogeneity in founding rates and the performance of biotechnology firms. Research policy, 32(2), 229-253.   DOI
5 Weaver, K. M., Liguori, E. W., Muldoon, J., & Vozikis, G.(2011). Small firm relocation intent: an assessment of anecdotal causes. Advanced in Business related scientific research Journal, 2(1), 4-9.
6 Yang, S. O.(2011). The Comparison of the Validity and Reliability about Likert Scale's Response Formats According to the Number of Categories and the Existence of Neutral Point. Master's thesis. Ewha Womans University
7 De Bok, M., & Van Oort, F.(2011). Agglomeration economies, accessibility, and the spatial choice behavior of relocating firms. Journal of Transport and Land Use, 4(1), 5-24.   DOI
8 Bae, E. S., & Yun, K. S.(2021). An Analysis of Locational Determinants for Knowledge Services Startups in Busan. The Korean Journal of Local Government Studies, 25(1), 265-280.   DOI
9 Choi, H. B., & Yoon, S. M.(2004). An Empirical Study on the Regional Characteristics of Venture Business. Journal of the Economic Geographical Society of Korea, 7(1), 29-43.
10 O'brien, R. M.(2007). A caution regarding rules of thumb for variance inflation factors. Quality & quantity, 41(5), 673-690.   DOI
11 Do, H. Y., & Lee, Y. T.(2008). Empirical Study on Firm Relocation Choice in Seoul Metropolitan Area. Seoul Studies, 9(4), 131-144.
12 Kim, M. L., Kim, C. W., & Hwang, S. H.(2010). Validity of the Single Item Measure for Serious Leisure. Korean Journal of Leisure, Recreation & Park, 34(4), 147-156.
13 Choi, J. M., Yoon. H. D., & Moon, J. H.(2020). A Study on the Establishment of an Investment Platform for Reinforcing Innovative Growth and Scale-up of New Industry. Seoul: Korea Small Business Institute.
14 Choi, J. Y., & Oh, K. S.(2012). An Analysis on Inter-regional Relocation Patterns and Factors of Information and Communication Technology (ICT) Firms. Journal of Korea Planning Association, 47(7), 5-20.
15 Park, J. Y., & Sung, C. S.(2016). The Effect of Entrepreneurs' Social Network on Entrepreneurial Performance: Focusing on Moderating effect of Entrepreneurial Experience. Asia-Pacific Journal of Business Venturing and Entrepreneurship, 11(3), 87-96.   DOI
16 Bae, H. B., Song, M. K., & Kim, S. K.(2018). A Study on the Impact of Competency of Technology: Based Startups on Performance Using ETRI Technology. Asia-Pacific Journal of Business Venturing and Entrepreneurship, 13(1), 61-72.   DOI
17 Chung, S. Y., Hwang, D. H., & Im, J. B.(2016). A Study on the Impact Factors for Innovation Cluster: A Case of the Pangyo Techno Valley. Journal of Korea Technology Innovation Society, 19(4), 848-872.
18 Dahl, M. S., & Sorenson, O.(2012). Home sweet home: Entrepreneurs' location choices and the performance of their ventures. Management science, 58(6), 1059-1071.   DOI
19 Association. Adam, S.(1776). Wealth of Nations. London: W. Strahan and T. Cadell.
20 Dej, M., Jarczewski, W., & Chlebicki, M.(2019). Relocation of Economic Activity Within Major Metropolitan Areas in Poland-Scale and Key Characteristics. In Relocation of Economic Activity (pp. 87-108). Springer, Cham.
21 Elgar, I., & Miller, E. J.(2010). How office firms conduct their location search process? An analysis of a survey from the greater Toronto area. International Regional Science Review, 33(1), 60-85.   DOI
22 De Prijcker, S., Manigart, S., Collewaert, V., & Vanacker, T. (2019). Relocation to get venture capital: a resource dependence perspective. Entrepreneurship Theory and Practice, 43(4), 697-724.   DOI
23 Glider, G.(1989). Microcosm. New York: Basic Books.
24 Moon, N. C.(2008). Regional Disparity of the New Firm Formation in Korea. The Geographical Journal of Korea, 42(2), 255-267.
25 Erickson, R. A., & Wasylenko, M.(1980). Firm relocation and site selection in suburban municipalities. Journal of urban Economics, 8(1), 69-85.   DOI
26 Alkay, E.(2011). What determines the relocation tendency of manufacturing firms?. European Regional Science
27 Chung, J. J., & Lim, C. H.(2008). Empirical Analysis on RIC(Regional Innovation Capacity) and LPIE(Location and Performance of Innovational Enterprises). Journal of Governmental Studies, 14(4), 171-200.
28 Conroy, T., & Deller, S.(2014). Regional Growth and Development Strategies: Business Relocation, Patterns of Economic Growth and Development Policy Brief Series No. 1. Wisconsin.
29 Conroy, T., Deller, S., & Tsvetkova, A.(2016). Regional business climate and interstate manufacturing relocation decisions. Regional Science and Urban Economics, 60, 155-168.   DOI
30 Choi, J. Y.(2013). Concreteness of technological capabilities and Performance of technology based Start-up company, Asia-Pacific Journal of Business Venturing and Entrepreneurship, 8(1), 29-36.   DOI
31 Gardner, D. G., Cummings, L. L., Dunham, R. B., & Pierce, J. L.(1998). Single-item versus multiple-item measurement scales: An empirical comparison. Educational and psychological measurement, 58(6), 898-915.   DOI
32 Guzman, J. (2019). Go west young firm: agglomeration and embeddedness in startup migrations to Silicon Valley. Columbia Business School Research Paper, 18-49.
33 Holl, A.(2004). The role of transport in firms' spatial organization: evidence from the Spanish food processing industry. European Planning Studies, 12(4), 537-550.   DOI
34 Hu, W., Cox, L. J., Wright, J., & Harris, T. R.(2008). Understanding firms' relocation and expansion decisions using self-reported factor importance rating. Review of Regional Studies, 38(1), 67-88.
35 Yang, Y. S., Choi. J. I., & Hwang. B. Y.(2012). A Conceptual Study for Creating "A Good Quality Startup" by Algorithm-Based Entrepreneurship Education. Asia-Pacific Journal of Business Venturing and Entrepreneurship, 7(2), 141-150.   DOI
36 Porter, M. E.(1990). The competitive advantage of nations. Competitive Intelligence Review, 1(1), 14-14.   DOI
37 Srivastava, S. K., Amula, A., & Ghagare, P.(2016). Service facility relocation decision: a case study. Facilities, 34(9), 595-610   DOI
38 Van Dijk, J., & Pellenbarg, P. H.(2000). Firm relocation decisions in The Netherlands: An ordered logit approach. Papers in Regional science, 79(2), 191-219.   DOI
39 Yim, D. S., Kim, W. D., & Yu, J. H.(2004). The Evolutionary Process of Daedeok Science Town and International Comparison: In the Perspective of Innovation Cluster. Journal of Korea Technology Innovation Society, 7(2), 373-395
40 Barin, E.(2009). Industrial firm relocation: the case of Gebze organized industrial zone (Master's thesis).
41 Brouwer, A., Mariotti, I., & van Ommeren, J.(2002). The firm relocation decision: a logit model. European Regional Science Association.
42 Choe, M. G.(2003). Economic Trends and Countermeasures of the Liquor Industry in 2003. Korea Alcohol and Liquor Industry Association, 23(1), 1-10.
43 Choi, J. M., & Yoo, J. M.(2020). A Study on Vitalizing a Hub for High Technology Startups. Seoul: Korea Small Business Institute.
44 Choi, J. Y.(2010). Characteristics of Network and Performance of Technology Based Start-ups. Journal of Entrepreneurship and Venture Studies, 13(4), 87-108.
45 Cho, S. C.(2019). Location Distribution and Factors of Technological Manufacturing Start-ups in Korea. The Korea Spatial Planning Review, 456(10), 11-18.
46 Hwang, Y. S., & Chen, D.(2016). A reversal theory in internationalization: case of Korean jewelry inside China. Chinese Management Studies. 10(1), 82-101.   DOI
47 Zheng, D., & Shi, M.(2018). Industrial land policy, firm heterogeneity and firm location choice: Evidence from China. Land Use Policy, 76, 58-67.   DOI
48 Zhu, S., & He, C.(2013). Geographical dynamics and industrial relocation: Spatial strategies of apparel firms in Ningbo, China. Eurasian Geography and Economics, 54(3), 342-362.   DOI
49 Cooke, P., Uranga, M. G., & Etxebarria, G.(1998). Regional systems of innovation: an evolutionary perspective. Environment and planning A, 30(9), 1563-1584.   DOI
50 Yoon, B. S., & Seo. Y. W.(2016). An Empirical Analysis of the Effects of Startup' Activities of Preparatory Stage and Early Stage on Performance. Asia-Pacific Journal of Business Venturing and Entrepreneurship, 11(4), 1-15.
51 Koo, J., & Choi, J.(2013). The rise of the biomedical cluster in Wonju, Korea. In Clusters and Economic Growth in Asia. Edward Elgar Publishing.
52 Kwun, M. Y., & Jeong, H. J.(2012). The effect of entrepreneurs' characteristic, technological capabilities and network on firm performance of technology-based start-ups. Asia-Pacific Journal of Business Venturing and Entrepreneurship, 7(1), 7-18.   DOI
53 Lee, I. H. I.(2020). Startups, relocation, and firm performance: a transaction cost economics perspective. Small Business Economics, 1-20.
54 Jeon, D. H., & Joo, K. S.(2012). A Study on the Location and the Types of Enterprise in Ochang Technopolis in Chungcheongbuk-do(Province), Korea. Journal of The Korean Association of Regional Geographers, 18(4), 400-413.
55 Jones, L. L., & Woods, M. D.(2002). Economic Location Theory and Practice. (Unpublished work), Texas A&M University.
56 Kapitsinis, N.(2017). Firm relocation in times of economic crisis: Evidence from Greek small and medium enterprises' movement to Bulgaria, 2007-2014. European Planning Studies, 25(4), 703-725.   DOI
57 Shin, J. Y., & Kim, S. Y.(2014). Study on the urban planning necessity of Creative City considering downtown culture: focused on HongHap Valley, Seoul. Proceeding of Annual Conference of the Architectural Institute Of Korea, 34(1), 141-142
58 Kim, J. Y., & Shin. K. D.(2018). Growth Effects and Determinants of Located Firm in Knowledge Industry Center. Korea Real Estate Society, 36(3), 275-294.
59 Pellenbarg, P. H., Van Wissen, L. J., & Van Dijk, J.(2002). Firm relocation: state of the art and research prospects. Groningen: University of Groningen.
60 Roman, A., & Baay, N.(2019). The plight of London-based startups (Doctoral dissertation, Hogeschool van Amsterdam).
61 Ministry of Science & ICT.(2020). Survey on actual state of ICT SMEs. Sejong City: Ministry of Science & ICT.
62 Lee, M. S.(2017). A Study on Influence of Location Factors of Food Service Business Start-up Real Estate Store on Business Performance: Mediated Effect of Start-up Business Satisfaction, Asia-Pacific Journal of Business Venturing and Entrepreneurship, 12(2), 77-86.   DOI
63 Marshall, A.(1920). Principles of Economics. London: MacMillan and Co.
64 McLaughlin, G. E., & Robock, S. H.(1949). Why industry moves South: a study of factors influencing the recent location of manufacturing plants in the South. Kingsport Press, National Planning Association, Kingsport Tennessee.
65 Moon, J. S., & Jang, W. G.(2008). A Study on Location of Mobile Field Testbed. The Journal of Korean Institute of Communications and Information Sciences B, 33(3), 159-164.
66 Nguyen, C. Y., Sano, K., Tran, T. V., & Doan, T. T.(2013). Firm relocation patterns incorporating spatial interactions. The Annals of Regional Science, 50(3), 685-703.   DOI
67 Nicolai, J. P.(2019). Dirty versus Clean Firms' Relocation under International Trade and Imperfect Competition. CER-ETH-Center of Economic Research at ETH Zurich Working Paper,(19/319).
68 Lee, M. S.(2016). A study on the Location Factors Impact on the Satisfaction of Venture Companies: Around anyang City Development Stractegy. Asia-Pacific Journal of Business Venturing and Entrepreneurship, 11(2), 207-219.   DOI
69 Capik, P., & Dej, M.(2019). Spatial organisation and movements of firms and industries: the role of firm and place in (re) location research. In Relocation of Economic Activity(pp. 1-11). Springer, Cham.
70 Kim, S. H., Byun, C. G., & Kim, G. T.(2011). A Study on Relocational Intention to the Business Investment Climate in Gyeongnam Province Area Firm. Journal of Industrial Economics and Business, 24(5), 3097-3118.
71 Kiss, E.(2007). The impacts of relocation on the spatial pattern to Hungarian industry. Geographia Polonica, 80(1), 43.