Enterprise Location Selection for "Diversified Connection Space": Urban Micro-Location Analysis Based on an SGWR Model

Abstract

The cultural, economic, institutional, and social connotations of "diversified connection space" are used as the spatial basis in urban micro-location and firm location selection. This study examines the evolution of firm location selection from the perspective of "diversified linkages", incorporates "diversified linkages" in urban micro-location with the firm location evolution model based on the assumption of "cost sharing," and discusses urban micro-locations, diversified linkages, and enterprise location selection. The selection of a firm's location is determined not only by economic factors and market mechanisms, but also through the interaction of location-specific economics with social and geographical factors that manifest themselves as a common set of rules and entrenched social and cultural practices. For example, behavioral norms and social relationships among entrepreneurs that permeate the internal economic relations and production activities of enterprises can influence the location selection of these enterprises. Using the findings of empirical research on information technology enterprises, such as those based in Shenzhen, micro-enterprises, and micro-locations in urban space, we examined the factors that influence the selection of a firm's location using Ordinary Least Squares (OLS) regression, Geographically Weighted Regression (GWR), and Semi-parametric GWR (SGWR) analyses. The results showed that spatial selection of enterprises in urban micro-locations occurred through a combination of bottom-up market mechanisms and top-down policies, and that the influence of traditional factors were more significant. Although land use and function categories were significant factors, the robustness of other variables was not strong. In addition, the results of GWR and SGWR analyses were better than those of OLS regression, indicating significant spatial heterogeneity in urban micro-locations. The spatial diversity and heterogeneity of space were also verified, to a certain extent, by differences between local and global variables. Therefore, "diversified connection space" attributes the focus of an urban micro-location to spatial elements and the spatial mechanism of firm location selection, such that economic, geographical, and social spaces are compatible. It is also influenced by a combination of economic, geographical, institutional, and social factors. This process is not only affected by economic factors, such as factor endowment and economic function (of land use) and its market role, but also by planning, policy, traffic conditions, and other "cost sharing" factors. Consequently, the meaning and usage of urban micro-location and location theory have expanded.

Keywords

• location selection
• diversified connection space
• urban micro-location
• sgwr
• high tech electronic information enterprise
• shenzhen