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Where do manufacturing firms locate their headquarters?

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Author Info
J. Vernon Henderson
Yukako Ono

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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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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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This paper has been announced in the following NEP Reports: References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Stuart S. Rosenthal & William C. Strange, 2003. "Geography, Industrial Organization, and Agglomeration," Center for Policy Research Working Papers 56, Center for Policy Research, Maxwell School, Syracuse University. [Downloadable!]
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  2. Patrick Bayer & Robert McMillan & Kim Rueben, 2004. "Residential Segregation in General Equilibrium," Working Papers 885, Economic Growth Center, Yale University. [Downloadable!]
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  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. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Esteban Rossi-Hansberg & Pierre-Daniel Sarte & Raymond Owens III, 2005. "Firm Fragmentation and Urban Patterns," NBER Working Papers 11839, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  2. Oliver Falck & Michael Fritsch & Stephan Heblich, 2009. "Bohemians, Human Capital, and Regional Economic Growth," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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  3. Edward L. Glaeser & Joshua D. Gottlieb, 2009. "The Wealth of Cities: Agglomeration Economies and Spatial Equilibrium in the United States," NBER Working Papers 14806, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Oliver Falck & Michael Fritsch & Stephan Heblich, 2009. "Bohemians, human capital and regional economic growth," Working Papers 2009/12, Institut d'Economia de Barcelona (IEB). [Downloadable!]
  5. Strauss-Kahn, Vanessa & Vives, Xavier, 2006. "Why and where do headquarters move?," IESE Research Papers D/650, IESE Business School.
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