The effects of the economic crisis on firm mobility: a comparative analysis of pre- and post-crisis Greek firm movements to Bulgaria

Abstract

This paper focuses on the way that the current economic crisis affects firm mobility trends, its broader incentives and the elements of the economic and institutional framework that determine firm relocation. In achieving the research objectives, a comparative analysis of firm movements from Greece to Bulgaria in the pre- and post-crisis period is employed. Greece constitutes a notable case in examining the impacts of the crisis on socio-economic phenomena, given that the Greek economy has been severely affected by the economic turmoil. Firstly, it is indicated that the crisis accelerates firm movements from Greece to Bulgaria. Secondly, the largest part of firm owners in the post-crisis period move their corporations striving for maintaining business, whereas in the pre-crisis period many entrepreneurs aimed at expanding markets and reducing operational cost. Finally, the crisis has impacted on the degree of importance of elements of the economic and institutional environment that affect firm mobility. Crucial changes are observed in respect of labour cost, level of demand whilst access to external finance emerges as a critical firm relocation factor.