The Location of Industries: The Effect of Chance or Rational Choice?

The choice of location plays a major role in the strategies of firms. They are looking for qualified labor, a potential market, but also infrastructure, good accessibility, etc.: an “optimal” location. Indeed, the location is influenced by a greater or lesser number of factors whose weight and diversity vary greatly from one situation to another and the same factor can exert different influences. So, a single factor cannot explain the location of a firm. This study analyzes the location factors of industrial companies in the commune of Littoral. The data used come from the base of the RGE 2, 2008, and the base of the Statistical and Fiscal Declarations (DSF) available to the INSAE and covers the period from 2012 to 2016. After a descriptive analysis of the companies according to the distance to the center of Cotonou, we have developed a probit model under the STATA software using the factors identified in theoretical and empirical work. It emerges from the descriptive analysis that distance influences the location of industrial enterprises. The tests revealed that the distance, the market across, the sale of the manufactured products and services positively influence the location decision of the companies. So, companies locate in Cotonou to benefit more from the market.


Introduction
Studies on the location of companies exist in the form of theoretical and empirical work and under a multiplicity of angles of analysis. This paper addresses the factors related to the location of businesses in the Littoral department in Benin. In the literature, theoretical work addresses the paradigms presented by Ponsard (1988) where models of urban economy have their origins in the work of Von Thünen then in the residential location of firms in an urban environment and later in the model of Krugman"s geographic economy which generates externalities.

Models of Urban and Geographic Economy
The analysis of localization depends on several factors described in different theories. Von Thünen (1826) as one of the first having taken into account space in the economy and having given rise to the paradigm. The father of location theories explains the optimal locations of agricultural activities according to distance and specifically the cost of transport. Sensitive crops are located near residences and less distant from urban centers than multi-year crops. According to the author, the cost of transport Among the location criteria, some are "classic", others are less so and seem to be linked to the characteristics of supply, demand, and location. They could be grouped by major types of factors, to which correspond the main reasons for location.

Choice of location of an
Characteristics of companies and

The Factors That Characterize Companies
The choice of location varies according to the specific characteristics of companies and establishments.
But each case differs from the others and it is not possible to consider everything. Merenne-Schoumaker (1991) identifies 05 characteristics; (1) the influence of the industry and the establishment and life cycle of the product, the influence of other features of the establishment: (2) size, (3) function and (4) the nature of the location operation from which it results; (5) the level of geographic presence of businesses (multinational firms, foreign firms from neighboring countries, national firms with multiple headquarters and local firms). In our study, we will focus on the industry and size.

1) The branch of activity of the establishment and the life cycle of the product
The location of the different types of activities meets specific criteria. It is difficult to generalize (to synthesize) on the location of sectors, except for a few specific sectors such as the steel industry.
Location factors are influenced by business needs related to the product lifecycle. Because the big cities of developed countries combine characteristics favorable to the launch of new products. While peripheral areas, and more particularly the Third World, are more suited to the production of mature products.

2) The size of the establishment
The size of the establishment has an impact on labor and surface requirements. The more the size increases, the more the number of implantation sites which can be suitable decreases. Because, on the one hand, the vast well-located land is relatively scarce and, on the other hand, the number of workers available and the means of communication must be sufficient in the area of influence of the site. If the site is well served and the modes of transport are fast and inexpensive, the area of influence increases.

3) The function of the establishment
There are differences between the location of industrial service activities and production activities.
The activities of the industrial tertiary sector seek to locate themselves near large urban centers and often oppose exurbanization. Tertiary functions no longer need a quality urban environment; In contrast, production activities, especially those that require few qualified personnel, move more easily and more often choose small towns or rural areas. The availability, reputation, and low cost of labor are more attractive.

4) The nature of the location operation
The nature of the location operation, that is to say, the type of situation which leads to the decision of a new location. Three situations can be envisaged: the creation of an establishment, the extension of an existing business, and the transfer of an already operating unit. There are intermediate situations, for example, the transfer can concern the whole company, only production or a specific activity. In the case of an extension, companies can seek to minimize the distance between the old and the new establishment, to allow the arrival of raw materials, the flow of products, and contacts between divisions. In the case of a transfer, different factors can explain the limitation of the distance such as, the location of the clientele.

5) The level of geographic presence of companies
Merenne-Schoumaker (1991) distinguishes four levels of geographic presence, to which different behaviors correspond.
The locations of the firms are different depending on whether they are multinational firms, foreign firms from neighboring countries, national firms with several offices, or local firms. For multinational firms, the creation of a new unit is achieved using an already more or less proven technique and some experience. The new location is part of a complex network within the firm. The company deals above all with the national authorities and is not very sensitive to regional traditions. Foreign firms from neighboring countries frequently own a limited number of establishments. As they often find it difficult in their own country to expand, they seek to locate themselves not far from the borders to limit travel between their new establishment and the parent company. This new location should allow them to solve problems: labor, land, funding, regulations, etc. The national companies have several establishments spread over the territory. The number, location, and nature of their activities influence the decision. Generally, the new unit is part of an overall program where the market factor plays an essential role. However, certain transfers or extensions may have as their primary motive the resolution of a specific problem, in particular, that of the recruitment of the workforce. Finally, regional or local companies are often family businesses with only one establishment. The creation of a new unit (or the transfer of the only existing one) then constitutes a real adventure. These firms know their environment well and are very sensitive to local aspects. They almost always come into contact with local or regional authorities who can thus have an important influence.
 Availability of land and buildings: Companies have increasing space requirements; they are as much about quantities and quality. The search for low-cost equipped land located in a quality environment. The available buildings are a location factor, if the building is new or in good condition it is easily reusable. The multiplication of industrial parks and the development of industrial real estate modify the procedure for choosing a location (Merenne-Schoumaker, 1991). The activity zones have an impact on the organization of the territories, the activity zones are defined as "a set of land acquired and grouped by a client, general public, sometimes private, and previously equipped to facilitate the "installation, the functioning and development of establishments of an economic nature"" (Moatti, 1968 cited by Million, 2004). These activity zones constitute a challenge for companies through the spaces, equipment, and services they offer for their establishment and development. For establishments in Greater Lyon located outside the center, 28% of the total are located in an activity zone. For industries, almost half of the industrial establishments (48%) are located in an activity zone (MILLION, 2004). 28% of the total are located in an activity zone. For industries, almost half of the industrial establishments (48%) are located in an activity zone (MILLION, 2004). 28% of the total are located in an activity zone.
For industries, almost half of the industrial establishments (48%) are located in an activity zone (MILLION, 2004).
 The quantitative and qualitative aspects of the workforce: Labor is the main location factor for most industries, this comes from two facts: on the one hand, the reduction in traditional production constraints for a large number of companies and the increase in the main job -work and on the other hand an increasingly marked intervention of the public authorities. The workforce has four aspects (Merenne-Schoumaker, 1991): availability, qualification, reputation, and cost. Availability plays a role at the level of large companies (limited recruitment difficulties). The availability of labor also has a qualitative aspect in terms of age and sex (for example, some companies seek to recruit young staff).
From the qualification point of view, companies have requirements for the required training, some companies reject rural areas or on the contrary they seek areas where the qualification of the population is less advanced. The reputation of the workforce includes qualitative elements such as regularity (absenteeism), speed (training in the workplace), efficiency, stability, etc. But it is difficult to assess these characters correctly, the appreciation of the workforce on these points is sometimes based on stereotypical images or old statements and can become completely false. The cost of labor is an important criterion of location but to be balanced by productivity. The reputation of the workforce includes qualitative elements such as regularity (absenteeism), speed (training in the workplace), efficiency, stability, etc. But it is difficult to assess these characters correctly, the appreciation of the workforce on these points is sometimes based on stereotypical images or old statements and can become completely false. The cost of labor is an important criterion of location but to be balanced by productivity. The reputation of the workforce includes qualitative elements such as regularity (absenteeism), speed (training in the workplace), efficiency, stability, etc. But it is difficult to assess these characters correctly, the appreciation of the workforce on these points is sometimes based on www.scholink.org/ojs/index.php/uspa Urban Studies and Public Administration Vol. 3, No. 3, 2020 Published by SCHOLINK INC. stereotypical images or old statements and can become completely false. The cost of labor is an important criterion of location but to be balanced by productivity.

The Economic, Human and Political Environment
 The economic environment: the choice of a location can be influenced by finding proximity to other businesses. The search for proximity can be explained by the direct relations existing between the new establishment and those established in the surroundings. The consideration of the economic climate of the region, the search for a particular neighborhood (example: search for firms of the same nationality, same activity, or contrary to small firms who wish to locate next to a larger one). This behavior of firms aims to minimize risks (Merenne-Schoumaker, 1991). The proximity of firms has the effect of energizing the environment and creating ripple effects (incentive for modernization, innovation, creation, etc.). External economies play an important and complex role, they are the collective benefits that companies perceive under their relative position, independently of any market exchange. As we saw earlier, agglomeration economies are made up of localization and urbanization externalities. The localization savings result from the agglomeration of similar or neighboring activities and the urbanization savings are linked to the sectoral diversity on the territory. The agglomeration savings can be sought by two types of companies. Companies linked to the population and companies linked to production. For companies linked to production, companies" search for agglomeration economies leads to the development of "generalist" or technological cities. "Generalist" cities are defined by The conceptual model can be expressed as follows: Or Y i is the dependent variable which takes the value 1 if the company decides to settle in Cotonou and 0 if not. Xi is the matrix of independent variables relating to the decision to set up the business in a given municipality, i the vector of the parameters to be estimated, and Fi the delocalization index.

Significance of the Regression
The maximum likelihood estimator ̂ follows approximately a multivariate normal distribution ̂( ̂) , where P is the number of coefficients. To assess the significance of the coefficients, one can use the tests below.

Wald test
The Wald test assesses the relevance of the individual covariates . To this end, we consider the assumptions: against We calculate the realization of:

̂ ̂ ̂
Statistics follow a reduced centered normal law.

Likelihood ratio test
For this test, we consider the following hypotheses: Against : there is at least one non-zero coefficient.
To do this, we calculate the likelihood ratio statistic: Where is the value of the log-likelihood under and and ; the log-likelihood value evaluated in . Under , follows approximately a chi-square law with p degree of freedom.
The quality of the model is assessed by using the likelihood of the model which follows a Chi-square law. The model is said to be globally significant, when the value of the likelihood is greater than that of the Chi-square at the same degree of freedom, and a given threshold (1%, 5%).

The Explained Variable
The variable explained is made up of the company"s decision to settle in a given municipality. It is a binary variable. It takes the value 1 (y = 1) for the case where the company is installed in Cotonou and the value 0 (y = 0) for the case where the company is not installed in Cotonou.  (2015) Djinsu (

Typology of Companies by Industry
The industrial sector in Benin is made up of 09 branches of activity. Table 2 presents the nomenclature and typology of industrial enterprises in Benin.

Sector Structure
The sector is dominated by the Wood and Furniture industry. More than half of the industrial companies listed (54%) are found in the "Wood and furniture" industry; the "Food products" branch accounts for 16% of economic units. Companies in the "Printing" branch represent 10% of the economic units listed; whereas the branches of activity relating to the manufacture of chemical products, and the production and distribution of water and electricity represent only 4% and 5% respectively. There is very little representation from companies manufacturing textile products. Besides, the cotton ginning branch accounts for 2% of industrial companies in Benin. The      -500]. This reflects the Beninese reality around the big cities Cotonou and its surroundings, Abomey and its surroundings, Parakou, and its surroundings.
The histogram below reflects the location of businesses by distance.

Factors for the Location of Industrial Companies in Benin
The empirical results of the analysis model of the factors linked to the location choices of industrial companies in Cotonou show that the value of the global significance test of the model (2) is significant at the 1% threshold. We deduce that the model explains the factors that influence the choice of location for industrial companies in Cotonou. All the variables included in the model do not have the expected signs and are significant at the 5% level. Even up to 1% we have our results. We conclude that the variables are strongly linked. The percentage of exact prediction is also high (64.40%) and testifies to the validity of the model to make good predictions (Annex 4).
Published by SCHOLINK INC. Staff costs positively influence the probability that the business will be located in Cotonou. The companies use social and human capital strongly present on the territory of Cotonou. This demographic potential is beneficial for supply and also for demand. Ease of access to the market is therefore an asset linked to location.
The sale of manufactured products and services positively influence the probability that the company will be located in Cotonou. The production unit is set up for profit and this is demonstrated by the marketing policies established by it. The company sets up to meet the needs of populations in terms of industrial goods and services. The disposal of its finished products is then necessary.
The town has great potential in terms of population, which can represent a vast market made up of potential consumers. Their establishment is mainly motivated by the ease of access to consumer markets (consumption basins or seaports for export) as seen in Cotonou. Therefore, the presence of the market can explain the decision to locate companies in Cotonou.
Turnover negatively influences the probability that the company will be located in Cotonou. This result is contrary to our expectations. As just explained above, the sale of manufactured products and services should induce that turnover has a positive influence. Several companies in the industrial sector located in Cotonou do not have a high turnover. There are many service companies whose quality depends on staff resources.
Several authors have carried out empirical studies on this subject. Among them is (Oyono, 2015) whose work focuses on industrial location in the Center-Cameroon region. These variables relate to (total workforce in the sector, external services, turnover, customers, cost of transport, and products manufactured). All of these variables were significant at the 5% level. These variables (workforce, external services) present in our database and applied to the Beninese context do not explain the location of companies in Cotonou.
On the other hand, the variables cost of transport and products produced are as significant in Cameroon as for our results in the Beninese context.
Analysis of the context of the study therefore nuances the variables linked to location.
For its part, Djinsu (2013) notes in its study that proximity to factors of production is a factor in the location of industrial companies. These companies attract others to a territory which strengthens my agglomeration.
Bouvard in 2008, in his work, identifies the localization factors of economic activities regarding the urban area of Lyon. Its results show that the distance to the center, the number of jobs, the areas of activity as well as the population positively influence industrial location.
The location factors, therefore, vary according to the context of analysis, the size of the population, and the level of development.
Published by SCHOLINK INC.

Conclusion
The objective of this study is to analyze the of a location is the result of a greater or lesser number of factors whose weight and diversity vary greatly from one situation to another, from one period to another. The location factors in an empirical study can only be understood in a piecemeal fashion. This field of study is still very broad to understand in the case of the Republic of Benin.