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The Agglomeration of Headquarters

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  • J Vernon Henderson
  • James Davis

Abstract

This paper uses a micro data set on auxiliary establishments from 1977 to 1997 in order to investigate the determinants of headquarter agglomerations and the underlying economic base of many larger metro areas. The significance of headquarters in large urban settings is their ability to facilitate the spatial separation of their white collar activities from remote production plants. The results show that separation benefits headquarters in two main ways: the availability of di?erentiated local service input suppliers and the scale of other headquarter activity nearby. A wide diversity of local service options allows the headquarters to better match their various needs with specific experts producing service inputs from whom they learn, which improves their productivity. Headquarters also benefit from other headquarter neighbors, although such marginal scale benefits seem to diminish as local scale rises.

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File URL: ftp://ftp2.census.gov/ces/wp/2004/CES-WP-04-02.pdf
File Function: First version, 2004
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Bibliographic Info

Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 04-02.

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Length: 36 pages
Date of creation: Feb 2004
Date of revision:
Handle: RePEc:cen:wpaper:04-02

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