Skip to main content
Log in

New business location: how local characteristics influence individual location decision?

  • Original Paper
  • Published:
The Annals of Regional Science Aims and scope Submit manuscript


The aim of this paper is to identify the impact of local characteristics, such as the relative concentration of economic activities, on new business location decisions based on their sectors of economic activity. Spatial establishment-level, micro-data, pooled over time (2008–2014) was used for a typical Canadian nonmetropolitan area—the Lower St. Lawrence region—in the province of Quebec. The study was conducted on a radius of 1250 m to describe the local economic environment. Results of our employed multinomial logit model reveal that local characteristics influence the location decision of new individual establishments for most of the economic sectors. An econometric model is developed to simulate the probability that a new establishment (in a given economic sector) will be located at a given geographic location based on this location’s characteristics. Results confirm that the location decisions for new primary sector businesses are related to the presence of benefits arising from the existence of natural resources as well as those benefits associated with having large spaces (such as in the case of rural cities). New manufacturing sector businesses are mainly looking for a co-location (specialisation) pattern, with a slight preference to locate in small-sized cities. Finally, the location decisions of service sectors firms are strongly dependent on intermediate demand and on the distance to major markets.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Subscribe and save

Springer+ Basic
EUR 32.99 /Month
  • Get 10 units per month
  • Download Article/Chapter or Ebook
  • 1 Unit = 1 Article or 1 Chapter
  • Cancel anytime
Subscribe now

Buy Now

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Fig. 1
Fig. 2
Fig. 3
Fig. 4
Fig. 5
Fig. 6

Similar content being viewed by others


  1. For each sector, the corresponding economic activities are those whose three-digit NAICS code is part of the economic sector.


Download references

Author information

Authors and Affiliations


Corresponding author

Correspondence to Ismaëlh Cissé.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.


Appendix 1

See Table 4.

Table 4 Descriptive statistics of spatial characteristics’ variables, 2008–2014

Appendix 2

See Table 5.

Table 5 Three-digit NAICS code classification for related variety

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Cissé, I., Dubé, J. & Brunelle, C. New business location: how local characteristics influence individual location decision?. Ann Reg Sci 64, 185–214 (2020).

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI:

JEL Classification