Software companies are more likely to base their operations in locations where skilled potential recruits already work – rather than staff moving to new areas for fresh opportunities.
New research from Lancaster University, the University of Illinois and Texas Tech University shows new firms commonly establish headquarters within a mile of existing software businesses. However, while this makes recruitment easier, there is no evidence of increased profitability as a result.
The study, published in the Journal of Economic Behavior & Organization, looks at software firms in Texas over a six-year period. There were 431 new establishments in this time, and software firms regularly set up close to established businesses, with an average of 10 within one mile, employing 394 workers between them.
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