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FIRM SIZE AND LOCATION CHOICE OF FOOD INDUSTRY: IZMIR/TURKEY CASE

Nilnaz Akbaşoğullari () and Hasan Engin Duran ()
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Nilnaz Akbaşoğullari: MSc City Planner, Izmir, Turkey, Tel: +90 554 972 37 64

Regional Science Inquiry, 2020, vol. XII, issue 2, 123-132

Abstract: Purpose of the current study is to analyze the determinants of firm location in Izmir’s food industry. The dataset covers 734 firms in 2018. The analyses particularly focus on the impact of experience and size of the firms, the effects of which are not yet adequately analyzed by the existing literature. In terms of methodologies, initially, explorative maps are used to illustrate the data. Then, linear regression analyses are applied to analyze the location behavior determinants. Spatial autocorrelation test is applied to as a robustness test. Our findings point to three main results. First, firm size is not statistically a significant determinant of firm location. So, big firms may locate in/around or out of cities, whereas, also small firms may locate close to or distant from city centers Second, the influence of the experience variable is rather definite; earlier founded firms naturally locate closer to CBD. Third, with regard to results regarding sub-sectors, firms in packaged food and bakery sectors locate nearby CBDs where, in contrast, firms in animal products sector tend to locate in rural areas. Overall, the key lesson that we learn from the analysis is that concentration of large firms around urban areas should be avoided so to cope with environmental problems and to maintain fair competition between big and small firms. Moreover, younger firms should be subsidized (through tax exemptions, rental aid, export and employment subsidies) so that their capital structure remains strong even if they are not able to place close to the market.

Keywords: Location Choice; Food Industry; Determinants; Firm Size (search for similar items in EconPapers)
JEL-codes: D22 R3 (search for similar items in EconPapers)
Date: 2020
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