The Influence Of Innovation On The Location Choices Of Firms

The theories and practices of the location choices of firms are important and traditional components of regional economics.Location theories study why certain economic activities happen on certain geographical location,and why certain economic infrastructure is established on certain geographical region.Since German economist J.H.Th(u|¨)nen who is the father of spatial economics brought forward agricultural location theory in 1826,location theories have gone through classical. neoteric,and modern stages.The regional economic researchers of China regard the location choices of firms as theoretical front in recent years.They propose that systematic research on the location choices of firms should be carried out according to the situation of our country.We find out that the factors that influence the location choices of firms which traditional location theories have given attention to are superficial,and that the decisive factor of the location choices of firms is innovation. Regional economic development relates closely to the location choices of firms. Innovation,which is the essence of knowledge-based economy,plays a very important role in the location choices of firms.Therefore,it is not only a theoretical research subject for regional economics,but also a valuable reference for regional economic activities tracing the ways and mechanism through which innovation affect the location choices of firms.This dissertation combines normative study and empirical study.It reviews the achievements of western researchers on location theories so as to summarize the major factors that influence the location choices of firms.Then it introduces the theories of innovation economics,puts forward the opinion that innovation is the factor that has the strongest effect on the location choices of firms.It explores vertically the effects of technological innovation,institutional innovation,and organizational innovation on the other factors that influence the location choice of firms,and discusses horizontally the effects of technological innovation,institutional innovation,and organizational innovation on the location choices of firms in detail. And then it puts forward suggestions for the location choices of firms in our country according to the functions and characters of each innovation behaviorist.The dissertation is made up of eight parts:the introduction,six chapters,and the conclusionIn the introduction,the writer describes the theoretical and practical importance of this research.Location issue is not only a traditional important basic topic of regional economics which needs to be developed,but also a practical matter which is in urgent need to be studied,because with the development of globalization,the location choices of firms take on new characters.Innovation begins to have important effect on the location choices of firms.In China,although Chinese economy has been developing rapidly and continuously in the past thirty years,the regional economic disparities grow very serious.The unbalanced development of regions is in fact the unbalanced geographical distribution of economic activities.In fact,it results from the location choices of firms.What are the factors that affect the location choices of firms and how innovation influences location choices are worthy to be studied.Chapter two gives a literature review of location theories,and points out the major factors that affect the location choices of firms.After a general theoretical analysis on the connotation of location choices of firms,the importance of the location choices of firms,the factors that influence location choices,it reviews traditional location theories,and summarizes the major factors that influence the location choices of firms,which are mainly transportation fee,labor cost,market demand,resource endowment,agglomerative factor,and other factors.It explains the contributions of traditional theories,points out that the deficiency of traditional location theories lays in the ignorance of the influence of innovation on the location choices of firms,and brings forward definitely that innovation is the most important factor that affects the location choices of firms.Chapter three analyzes the influence of innovation on the location choices of firms.It first gives the definition of innovation,analyzes the connotation of innovation,the composition of innovation;then it introduces the main theories on innovation,discusses the relations between innovation and economic development and firms' development;finally,it addresses the influence of innovation on the location choices of firms,including the effects of innovation on transport fees,labor costs,market,resource endowment,agglomerative factors,other factors,and the retroactive effects of innovation. Chapter four discusses the influence of technological innovation on the location choices of firms.It first discusses the influence of technology innovation on the location choices of firms.Then it analyzes the mechanism through which technological innovation impacts on the location choices of firms comprehensively. Case study is carried out to give further explanation,with the development of Silicon Valley and the global location choices of Haier group being discussed.Chapter five analyzes the effect of organizational innovation on the location choices of firms.It first explains the effects of organizational innovation on the location choices of firms.Then it analyzes the mechanism through which organizational innovation influences the location choices of firms comprehensively. Case study is carried out to give further explanation,with the location choices of Taiwan electronic clusters in Dongguan of Guangdong province,and the location choices of Nike Company in the whole world.Chapter six focuses on the influence of institutional innovation on the location choices of firms.It first explains the effects of institutional innovation on the location choices of firms.Then it analyzes the mechanism through which institutional innovation influences the location choices of firms comprehensively.Case study is carried out to give further explanation,with the electronics and information agglomeration zones on the southeast coastal the revitalization of Ruhr industrial zone being discussed.Chapter seven puts forward suggestions for the location choices of firms.This chapter is the application of the theories put forward in the above chapters,through reviewing the history and current status of the spatial distribution of enterprises in China,and applying the theories on the influence of innovation on the location choices of firms put forward in the above chapters,it gives suggestions for the location choices of entrepreneurs,the construction of regional location environment of local governments,and the establishment of regulations on the location choices of firms of the central government.In the conclusive part,it brings forward seven conclusions.First,the factors that affect the location choices of firms brought forward by traditional location theories are mainly transport fee,labor cost,market demand. factor endowment,agglomerative factor,and other factors.Second,the traditional location theories are fatally imperfect.They ignore the factor of innovation.The practice has shown that innovation is the most important factor that affects the location choices of firms.In the process of industrialization and economic development of the world,the factors that influence the location choices of firms have been changing constantly. They are possibly related to the appearance of new economic structure,new products, new methods of transport,new production organizations,and new institutions,but these changes are in fact the demand of innovation.Innovation is the substantial factor in the decision of location.Third,innovation has strong effect on the location choices of firms. Technological innovation,institutional innovation,and organizational innovation all have rudimentary impact on the other factors that affect the location choices of firms, such as transport fee,labor cost,market factor,resource factor,agglomerative factor, other factors,etc.Fourthly,we make clear that technological innovation affects the location choices of firms directly.Firstly,technological innovation has direct influence on the behaviorists that make the location choices.Secondly,technological innovation influences all the other location choice factors.The application of technologies,the enhancement of the skills of laborers,the improvement of productivities,the diversifcation of transport methods,the reduction of transport costs,the agglomeration of firms,and the reduction of transaction costs,etc.make the room for the location choices of firms larger.Fifthly,organizational innovation affects the location choices of firms.When firms choose their location,they should make organizational innovation according to the changing exterior environment and the improvement of organizational objectives and interior demand.Only through adjusting organizational style,modifying organizational structure,improving management,and cultivating competitive advantage can enterprises realize sustainable development.Sixth,institutional innovation affects the location choices of firms indirectly.It guides and drive firms choose locations intentionally,and provides law and regulation guarantee for the location choices of firms.Institutional innovation always break through the constraints of ideas,traditions,regulations,systems,etc.,and dig out the potential of technological innovation,cut out new spaces for the location choices of firms,and promote the location choices of firms to the largest extent. Seventh,innovation is the driving force for a country to realize prosperity,and the magic weapon for an enterprise to win in the fierce competition.The central government should channel off technological innovation,expand the scope and space for the location choices of firms,establish technological inspiration mechanism,modify regional investment environment.Local governments should adjust their functions,establish the institutional environment that is attractive to firms,and construct favorable market facilities.Firms should promote technological innovation,attach importance to entrepreneurs,cultivate entrepreneur spirit,make location choices independently,actively locate themselves in industrial clusters,and try to realize multinational operation.