Firm relocation has been highlighted as an entrepreneurial opportunity for reduction of operational cost and market expansion, affected mainly by labour cost, in theories articulated in the context of economic growth. However, the 2007 global economic crisis has significantly altered the business conditions. Early reflections on post-crisis business mobility have focused on big companies at the expense of small and medium enterprises. The research aim of this thesis is to comprehensively study the movements of small and medium firms in the aftermath of the crisis.
This thesis focuses on firm relocation from Greece to Bulgaria that has significantly increased since 2007. It seeks to reply on how and why Greek businesspeople have moved to Bulgaria and what is the impact of the crisis on firm relocation. These research questions are resolved by comparing pre- and post-crisis firm movements, employing a cultural political economy approach by combining Marxist and Institutional accounts, and adopting a qualitative method involving closed questionnaires and semi-structured interviews with Greek entrepreneurs in Bulgaria.
The research suggests that the 2007 global economic crisis had a crucial impact on firm relocation from Greece to Bulgaria and enriches the main relocation theories, such as the New International Division of Labour and Cross-Border Entrepreneurship, which were established in the context of economic growth. Specifically, while in the pre-crisis period, business mobility was an entrepreneurial opportunity for business growth, since 2007, it has been an absolute necessity for the entrepreneurs to break free of the Greek socio-economic environment and stay in business. Moreover, the significance of relocation determinants records crucial differences between the pre- and the post-crisis period. While labour cost has been identified as the most important relocation factor in economic geography literature, it was found relatively insignificant for post-crisis firm movements from Greece. Within this environment, elements not fully examined by economic geographers, such as the lack of demand for products and services and restricted access to external finance, emerged as crucial relocation factors. Overall, push relocation determinants were more significant in the post-crisis context. The difference in the significance of relocation factors is also affected by the type of companies moving in each period. Before 2007, many entrepreneurs owned strong and productive firms relocating in search of higher profits, whereas in the post-crisis period most businesspeople owned weak and small productive enterprises moving to avoid business failure.
The wider lesson for economic geographers is that a theoretical understanding of firm relocation in times of crisis requires a detailed clarification of the geographically-specific socio-economic context and its transformations, examining both push and pull relocation factors and investigating the type of companies and entrepreneurs, primarily their motivations and features of the enterprises.