Firm relocation in times of economic crisis: evidence from Greek small and medium enterprises' movement to Bulgaria, 2007-2014

This paper examines firm relocation in the aftermath of the 2007 global economic crisis. In particular, the paper analyses the unprecedented recent increase in the movement of small and medium enterprises (SMEs) from Greece to Bulgaria using original insights by a survey of 103 Greek companies in Bulgaria. The findings suggest a reconsideration of the existing literature on firm mobility in order to explain the post-crisis movement of Greek SMEs. Entrepreneurs perceived firm relocation as a necessity, while, contrary to the existing literature, labour cost does not appear to have significantly influenced firm exit from Greece, the level of demand was highlighted as more important compared with the literature findings and access to external finance emerged as a major factor. Important among elements that attracted businesspeople to Bulgaria were low taxation and geographical proximity to Greece. The present analysis thus challenges the significance of firm relocation determinants in the literature.