Tuesday 13
C9 - Miscellaneous II
Chair: Fabrice Gilles
› 9:50 - 10:15 (25min)
› Room 103 - B. Martinu
Frictions in the corporate real-estate market, rms' relocation and employment
Antonin Bergeaud  2, 1, *@  , Simon Ray  3@  
2 : Paris School of Economics  (PSE)
Ecole d'Économie de Paris
1 : Centre de recherche de la Banque de France  -  Website
Banque de France
31 rue Croix des petits champs 75001 PARIS - France -  France
3 : Centre de recherche de la Banque de France
Banque de France
* : Corresponding author

The size of the premises in which rms operate clearly imposes an upper limit
to their business volume and their employment level and may be a potential hindrance
to the growth of dynamic rms. In this paper, we develop a partial equilibrium model
in which a representative rm makes a decision on relocation and employment level
considering the rm-level productivity path and the costs associated to relocation. We
predict that relocation costs primarily hinder the employment growth of rms aected
by an increase in productivity. Confronting these results using French rm-level data
over the period 1994-2013, and covering all sectors, we nd that,(i) local relocations have
sizable eects on employment growth of both growing and declining rms; (ii) higher
relocation costs lower rms' propensity to move; (iii) higher relocation costs constrain
job creation of the most dynamic rms. We nd that the highlighted mechanism has
substantial macroeconomic eect: our preferred estimates suggest that a reduction of
the relocation costs, through the removal of one of the identied tax friction, increases
the rms' propensity to move by 11% and raises the yearly employment growth rate of
the 10% fastest growing rms by 4%.

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