5. DISCUSSION AND CONCLUSION
5.2. Limitations and further research
Our study has several limitations that need to be taken into consideration when discussing our results.
The first set of limitations stems from the nature of the data. Our analysis in-cluded only those location factors that were inin-cluded in “The EU Regional Com-petitiveness Index 2016 Report” and had been reported by previous studies as significant location decision factors. This means that several other location fac-tors, such as labour costs or proximity to other units (Arauzo – Carod et al. 2010;
Pavlínek 2019), are not considered in our study that might still have an important impact on the location decisions of car manufacturing companies. Nevertheless, it was not the purpose of this paper to discover the whole set of location deci-sion factors; instead, we have focused solely on the relationship between regional competitiveness and location of car manufacturing companies and used the fac-tors included in the RCI report, which offers a consistent set of location facfac-tors with similar data types, structure and collection method for each EU region.
Table 9. Summary of the results
EU-28 non-CEE countries CEE countries
i.e. they are not needed, but only if…
counterbal-anced by other factors Main location factors +
Naturally, this does not mean that labour cost, for example, is not still one of the primary location decision factors, especially in the European car manufac-turing industry. Labour cost has been shown to be the most important location decision factor on the country level for automotive firms (Pavlínek 2019) and, therefore, is an important differentiator between the competitiveness of regions in different countries. Thus, whether an EU region is chosen or not by an auto-motive firm is not independent from country-level factors, such as labour costs.
However, our analysis excluded those competitiveness factors that are primarily determined on a country-level, and has focused instead on a sub-national level to identify those regional-level aspects that need to be developed by EU regions to improve their chances of hosting car manufacturing units.
In addition, we could not take into account different type of investments (e.g. greenfield vs brownfield) or the difference between various types of auto-motive subsidiaries (i.e. manufacturing vs R&D) due to the low number of stan-dalone R&D units in the EU, thus being unable to investigate whether units with different activities require different location advantages (Colovic – Mayrhofer 2011). Furthermore, data on the location of automotive units in the EU refers to the current situation, ignoring the temporal aspect of location decisions. How-ever, as argued by Slack et al. (2016), considering current locations is also a valid approach, as it implies the decision not to move operations from a given location.
Future research could investigate, using longitudinal datasets, the way location decisions are modified in time by companies along with the changing character-istics of different target locations or along the different types of activities carried out by automotive units.
Another set of limitations is concerned with the design of this study. As argued before, we have not focused on the dynamics of location decisions. Therefore, we have ignored such important decisions influencing the location of automotive units, as offshoring, backshoring, plant closure or upgrading/downgrading plant operations. How these decisions are influenced by the characteristics of (poten-tial) automotive locations remains an important question for further research.
Finally, our study measured location factors of automotive companies only indirectly, through the characteristics of the regions where these units are located.
How location decisions are actually taken and how different regional factors are considered is still underexplored (Pavlínek 2019). Therefore, in the future, pref-erably case study based research on company-level could further confirm and enrich our findings.
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