Geographic scale and the role of firm migration in spatial economic dynamics

Spatial economic change can be decomposed in it's demographic constituents firm formation, closure, relocation and growth. This pap er focuses on the role of relocation in the balancing equation of spatial economic dynam ics: Total Change(zone i) = New firms(i)-Closures(i)+ Growth(i)-Decline(i)+ Inmoves (i)-Outmoves(i). Whereas the other components are scale invariant (i.e. a firm b irth is a birth whether measured at the local or the regional level) for firm relocatio n the geographical scale is very important. The larger the size of the region, the s maller the number of border crossing relocations. The question about the role of firm mi gration in regional economic change can therefore only be answered taking into a ccount the geographical scale. In this paper we will answer this question for various geographical scales. The data that we use are from the longitudinal business register of the province of Gelderland, in the east of the Netherlands, covering the period 19 99-2002.