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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 locations 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.

Suggested Citation

  • J. Vernon Henderson & Yukako Ono, 2005. "Where Do Manufacturing Firms Locate Their Headquarters?," Working Papers 05-17, Center for Economic Studies, U.S. Census Bureau.
  • Handle: RePEc:cen:wpaper:05-17
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    File URL: https://www2.census.gov/ces/wp/2005/CES-WP-05-17.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    headquarters; coordination; location decision; manufacturing;
    All these keywords.

    JEL classification:

    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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