ABSTRACT
Country-and firm-specific factors determine a firm’s choice of location. Country-specific factors include home-and foreign-market size, the existence of a particular infrastructure, demand, costs, and home-and foreign-market structure. Firm-specific factors include a firm’s business know-how, its technological capabilities, the degree of product differentiation and the following of a niche strategy. The enlarged market access with its decreasing NTBs influence these country-and firmspecific factors. A firm can be located within an agglomeration of enterprises (or
industrial district) at home and abroad or outside such an agglomeration. In some industries there are highly specialised industrial districts even if the majority of all enterprises in the industry are located outside such districts. A firm’s choice of location and in what manner this choice became affected through the abolition of NTBs was investigated in chapters 2 and 3 on internationalisation models and market entry strategies. It is therefore interesting to analyse the case of SMEs located in industrial districts. As argued in chapter 1, the establishment of the EMU influences enterprises in these districts and the districts as a whole entity. Because of the diminishing transaction costs within the EU the relations between SMEs of a district might have changed. The difficulties involved in the different approaches regarding location choice are described below.
