Why High-technology Firms Choose to Locate in or near Metropolitan Areas

Various studies have provided evidence of the advantages of the ability of metropolitan areas to attract hi-tech industries, which employ advanced technology and are strongly involved in the process of innovation. This paper presents the results of an empirical study of the location choice of Israeli hi-tech industries within a metropolitan area, carried out in the Northern region of Israel (which encompasses the Haifa metropolitan area and its surrounding localities) and based on field-survey data obtained from hi-tech plants. The study investigates the effect of different factors on location choice and also identifies the direct contribution of each factor to the probability of choosing the metropolitan area as a preferred location. The implications of these findings for industrial policy are also discussed.