This article is the first to explore the determinants of international relocation of a firm. It is found that labour intensive firms in a highly industrialized and open economy such as Belgium tend to relocate more to other countries than their highly productive capital intensive counterparts. Access to a global network, firm size, and the rate of innovation have a positive effect on the probability of relocation. Uncertainty has a negative impact on the probability of relocation. The positive effect of firm size and profitability on the relocation decision is clearly distinct from its effect on the exit decision of a firm.

investment, multinationals, relocation, sunk costs
International Investment; Long-Term Capital Movements (jel F21), Multinational Firms; International Business (jel F23),
Economics Letters
Erasmus School of Economics

Pennings, H.P.G, & Sleuwaegen, L.I.E. (2000). International Relocations: firm and industry determinants. Economics Letters, 179–186. doi:10.1016/S0165-1765(99)00269-4