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Where do manufacturing firms locate their headquarters?

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  • J. Vernon Henderson
  • Yukako Ono

Abstract

Firms’ headquarters [HQ] support their production activity, by gathering information and outsourcing business services, as well as, managing, evaluating, and coordinating internal firm activities. In search of a better location for these functions, firms often separate the HQ function physically from their production facilities and construct stand-alone HQs. By locating its HQ in a large, service oriented metro area away from its production facilities, a firm may be better able to out-source service functions in that local metro market and also to gather information about market conditions for their products. However if the firm locates the HQ away from its production activity, that increases the coordination costs in managing plant activities. In this paper we empirically analyze the trade-off of these two considerations.

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Bibliographic Info

Paper provided by Federal Reserve Bank of Chicago in its series Working Paper Series with number WP-04-29.

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Date of creation: 2004
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Handle: RePEc:fip:fedhwp:wp-04-29

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Keywords: Corporations - Headquarters ; Industrial location ; Manufactures;

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References

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  1. Stuart S. Rosenthal & William C. Strange, 1999. "Geography, Industrial Organization, and Agglomeration," Center for Policy Research Working Papers 14, Center for Policy Research, Maxwell School, Syracuse University.
  2. Patrick Bayer & Robert McMillan & Kim Rueben, 2004. "Residential Segregation in General Equilibrium," Working Papers 885, Economic Growth Center, Yale University.
  3. Steven T. Berry, 1994. "Estimating Discrete-Choice Models of Product Differentiation," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 242-262, Summer.
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Citations

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Cited by:
  1. Pietro Alessandrini & Andrea Filippo Presbitero & Alberto Zazzaro, 2008. "Bank Size or Distance: What Hampers Innovation Adoption by SMEs?," Mo.Fi.R. Working Papers 2, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
  2. Oliver Falck & Michael Fritsch & Stephan Heblich, 2009. "Bohemians, Human Capital, and Regional Economic Growth," Jena Economic Research Papers 2009-049, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  3. Edward L. Glaeser & Giacomo A. M. Ponzetto, 2010. "Did the Death of Distance Hurt Detroit and Help New York?," NBER Chapters, in: Agglomeration Economics, pages 303-337 National Bureau of Economic Research, Inc.
  4. Esteban Rossi-Hansberg & Pierre-Daniel Sarte & Raymond Owens, 2005. "Firm Fragmentation and Urban Patterns," Discussion Papers 04-019, Stanford Institute for Economic Policy Research.
  5. Strauss-Kahn, Vanessa & Vives, Xavier, 2006. "Why and where do headquarters move?," IESE Research Papers D/650, IESE Business School.
  6. Aurélie LALANNE (GREThA, CNRS, UMR 5113) & Guillaume POUYANNE ( GREThA, CNRS, UMR 5113), 2012. "Ten years of metropolization in economics: a bibliometric approach (In French)," Cahiers du GREThA 2012-11, Groupe de Recherche en Economie Théorique et Appliquée.
  7. David Audretsch & Oliver Falck & Stephan Heblich, 2011. "Who’s got the aces up his sleeve? Functional specialization of cities and entrepreneurship," The Annals of Regional Science, Springer, vol. 46(3), pages 621-636, June.
  8. Davis, James C. & Henderson, J. Vernon, 2008. "The agglomeration of headquarters," Regional Science and Urban Economics, Elsevier, vol. 38(5), pages 445-460, September.
  9. Juan Alcacer & Mercedes Delgado, 2012. "Spatial Organization of Firms: Internal and External Agglomeration Economies and Location Choices Through the Value Chain," Working Papers 12-33, Center for Economic Studies, U.S. Census Bureau.
  10. Deschryvere, Matthias, 2009. "Mobility of Corporate Headquarter Functions: A Literature Review," Discussion Papers 1203, The Research Institute of the Finnish Economy.
  11. Eckhardt Bode & Franz-Josef Bade Bade & Eleonora Cutrini Cutrini, 2011. "Domestic and International Offshoring of Tasks," ERSA conference papers ersa11p1840, European Regional Science Association.
  12. Glaeser, Edward L. & Ponzeto, Giacomo A. M., 2008. "Did the Death of Distance Hurt Detroit and Help New York?," Working Paper Series rwp08-002, Harvard University, John F. Kennedy School of Government.
  13. Edward L. Glaeser & Joshua D. Gottlieb, 2009. "The Wealth of Cities: Agglomeration Economies and Spatial Equilibrium in the United States," Journal of Economic Literature, American Economic Association, vol. 47(4), pages 983-1028, December.

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