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- Title
Location Choices Across the Value Chain: How Activity and Capability Influence Collocation.
- Authors
Alcácer, Juan
- 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.
- Subjects
INDUSTRIAL sites; CELL phone equipment industry; LOCATION analysis; INDUSTRIAL location; INTERNATIONAL business enterprise management; ECONOMIC competition; CORPORATE growth; INDUSTRIAL clusters; RESEARCH &; development; INTERNATIONAL competition; AGGLOMERATION (Materials); SUBSIDIARY corporations
- Publication
Management Science, 2006, Vol 52, Issue 10, p1457
- ISSN
0025-1909
- Publication type
Article
- DOI
10.1287/mnsc.1060.0658