The Search Of The New Enterprises' Location Affect Their Survival

Enterprises,as the main body of microeconomics,play a significant role in the development of domestic economy.At the beginning of 2014,the number of newly-established firms reached 3.651 million,and there are 10 thousand firms appearing in the market daily,which rose by 82.4%compared with the year of 2011.These enterprises are the new engines accelerating economic growth in the "New Normal".Therefore,the survival and development of these enterprises will influence our international competitiveness directly.China is a vast country with disequilibrium in economic status between cores and peripheries,cities and countrysides.The disequilibrium is largely cause by geographical location.Because geographical location is such a significant element influencing the survival of enterprises,it is meaningful to analyze its influence on newly-established firms.This article is based on John Friedman's Core Periphery Theory and theory of the survival of enterprises and takes different phases of industrialization into account.It uses the method of duration analysis to carry out empirical analysis concerning the relationship between geographical location and newly-established firms.By using cox regression and index regression model to analyze data of 942,455 enterprises from 1998 to 2007,we can draw the following conclusions.In the initial and mid-term stage,agglomeration effects and resource superiority are the major influences that geographical location exerts on new enterprises.The relation between geographical location and survival time is inverse U shape.In other words,in typical provinces like Jiangxi,Henan,and in China in general,new enterprises in big cities have a lower risk of bankruptcy.With firms expanding into peripheral areas,however,the risk increases.And when they further expand and their locations go beyond the critical value,the risk will go down gradually on the contrary.In the late period of industrialization,the relation between geographical location and new enterprises is U shape.In big,developed cities like Beijing and Shanghai,the risk of surviving in the urban area is comparatively higher,whereas with the business expanding into suburb area,the risk gradually goes down.When the firms continue to expand into the outer suburb,however,the risk increases again.In general,analyzing the influence geographical location exerts on newly-established enterprises can provide theoretical basis and policy references for the government to carry out macro-control.