WINDOW ON THE NETHERLANDS THE ROLE OF THE NEIGHBOURHOOD FOR FIRM RELOCATION BART SLEUTJES* & BEATE VÖLKER** *Urban and Regional research centre Utrecht, Faculty of Geosciences, Utrecht University, 3584 CS Utrecht, the Netherlands. E-mail: b.w.h.sleutjes@uu.nl **Interuniversity Center for Social Science Theory and Methodology (ICS), Faculty of Social Sciences, Utrecht University, 3584 CS Utrecht, the Netherlands. E-mail: b.volker@uu.nl Received: December 2011; accepted January 2012 ABSTRACT The residential neighbourhood has become more important as a business environment as a result of economic and societal developments. However, some neighbourhoods are characterised by relatively high out-migration of firms; disadvantaged neighbourhoods in particular. This suggests that there may be factors at the neighbourhood level that steer relocation behaviour of local entrepreneurs. In this paper, we investigate how entrepreneurs valuate location aspects, including social and physical characteristics of the neighbourhood, and how this valuation relates to planned or actual firm relocation. The results show that the neighbourhood plays only a modest role for ‘being a (potentially) mobile firm’. Rather, relocation (propensity) results from growth ambition, and the most important reasons for both relocation and staying put are therefore the size and quality of the business premises itself or personal housing preferences. Policy aiming at retaining entrepreneurs in neighbourhoods is most successful if targeted at the supply of appropriate business space. Key words: Firms, entrepreneurs, relocation, neighbourhood, home-based businesses, business property INTRODUCTION Policies aiming at strengthening the neigh- bourhood economy in countries such as the Netherlands, Germany and the UK are in general directed to the creation of new jobs and attracting firms to neighbourhoods. Further- more, they aim to stimulate self-employment. However, in this respect the retaining of firms currently located in residential districts may be equally important. At the municipality level, a Dutch study by PBL (2010) found that in resi- dential neighbourhoods, the outflow of firms is larger than the inflow. This suggests that there are conditions in the neighbourhood that may push firms away from the specific area. It holds in particular for disadvantaged neighbour- hoods such as districts with a high residential fluctuation, poverty as well as high crime levels. Although firms in general leave residential areas because of firm internal factors, for example, growth (Pen 2002), many entrepre- neurs in residential neighbourhoods are home- based and have only modest growth ambitions for their enterprises. The number of such non- growing and often home-based entrepreneurs Tijdschrift voor Economische en Sociale Geografie – 2012, DOI:10.1111/j.1467-9663.2012.00713.x, Vol. 103, No. 2, pp. 240–249. © 2012 The Authors Tijdschrift voor Economische en Sociale Geografie © 2012 Royal Dutch Geographical Society KNAG Published by Blackwell Publishing Ltd., 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA