Location choices across the value chain: how activity and capability influence collocation

Location choices across the value chain: how activity and capability influence collocation

0.00 Avg rating0 Votes
Article ID: iaor20081165
Country: United States
Volume: 52
Issue: 10
Start Page Number: 1457
End Page Number: 1471
Publication Date: Oct 2006
Journal: Management Science
Authors:
Keywords: geography & environment, organization
Abstract:

There has been a recent revival of interest in the geographic component of firm strategy. Recent research suggests that two opposing forces – competition costs and agglomeration benefits – determine whether firms collocate in a given geographic market. Unexplored is (1) whether these forces have different impacts on R&D, production, and sales subsidiaries, leading to diverse collocation levels, and (2) how firm capabilities impact collocation by increasing or decreasing competition costs and agglomeration benefits. I explore these questions using the worldwide location decisions of firms in the cellular handset industry. I find that production and sales subsidiaries are more geographically dispersed, and R&D subsidiaries are more concentrated, than a random distribution would predict. When distinguishing firms by their capabilities, I find that more-capable firms collocate less than less-capable firms, regardless of the activity performed.

Reviews

Required fields are marked *. Your email address will not be published.