Enterprise location choice and regional sustainable development based on the theory of stable matching

Abstract

As an important path of industrial structure adjustment and upgrading, industrial transfer is of great significance to narrow the regional economic development gap in China and promoting the sustainable development of regional economies. The locational choice of firms is one of the main reasons for the transfer of industries. The aim of this study was to obtain an optimal and stable match between firms and local governments. By constructing an evaluation index system for enterprise location selection and an evaluation index system for local government investment attraction, and based on the relevant linguistic evaluation information, this study calculates the satisfaction of enterprises with the location and the satisfaction of local governments with the target investment enterprises and then obtains the optimal stable match between enterprises and local governments based on the constructed stable match model. Most of the previous studies only consider the location choice of enterprises and government’s investment attraction as their respective unilateral choice of location, ignoring the relationship between the two as mutual stakeholders. This study, however, examines firms’ choice of location and the government’s investment promotion from a bilateral matching perspective. The study also studies the mechanism by which the stable matching between enterprises and the government’s inducements to invest is realized. The results show that, based on the stable matching mechanism, a bilateral matching scheme between enterprises and the government can give full play to the decisive role of the markets in resource allocation, maintain long-term stable investment and cooperation between the two sides, and help China’s industries transfer and upgrade their quality in an orderly fashion.