Transportation/Communication Considerations in the Location of Headquarters for Multi-Establishment Manufacturing Firms

Abstract

Usually transportation/communication (t/c) considerations appear as only two in a long list of factors which determine headquarters location patterns. The research reported here singles out t/c considerations as the logical basis for headquarters location decisions. We ask: to what degree do transportation/communication consideration explain the patterns of headquarters location? The case of manufacturing firms with five or more establishments and no manufacturing activity at the headquarters location was examined. The t/c considerations were studied in terms of the advantages of close proximity between the headquarters of a firm and the manufacturing establishments of that firm and the advantages of close proximity between the headquarters of one firm and the headquarters of other firms. The findings of this research show that the logic of headquarters location patterns is heavily dependent on t/c considerations.