Office Decisions to Change Location

Abstract

Firm mobility is one of the processes a firm can go through during its time of operation. When aggregated, the mobility decisions of numerous individual firms affect the spatial distribution of economic activity and employment as well as the outputs of the transportation system in urban areas. Models of mobility of office business establishments that use hazard modeling and competing risk formulations are presented. These formulations explicitly account for the effect of the duration of the firm in its current location as well as forecast what type of stress or push factor (e.g., lack of space or excessive cost in its current location) will make the firm relocate. The results indicate that combining general hazard modeling with competing risk models could provide a foundation for modeling mobility decisions of firms as well as for estimating thresholds for the locations to which the firm may choose to move.