Spatial Organization of Firms

Posted: 15 Jan 2004

See all articles by Yukako Ono

Yukako Ono

Federal Reserve Bank of Chicago

Kristin Aarland

Brown University - Department of Economics

James C. Davis

US Census Bureau

J. Vernon Henderson

London School of Economics & Political Science (LSE); National Bureau of Economic Research (NBER)

Date Written: December 2003

Abstract

A firm's production activities are often supported by non-production activities. Among these activities are administrative units including headquarters, which process information both within and between firms. Often firms physically separate such administrative units from their production activities and create stand alone Central Administrative Offices (CAO). However, having its activities in multiple locations potentially imposes significant internal firm face-to-face communication costs. What types of firms are more likely to separate out such functions? If firms do separate administration and production, where do they place CAOs and why? How often do firms open and close, or relocate CAOs? This paper documents such firms' decisions on their spatial organization by using micro-level data from the U.S. Census Bureau.

Keywords: spatial organization, central administrative offices (CAO), opening and closing of CAOs, outsourcing, evaluation, monitoring

JEL Classification: L0, L2, R0

Suggested Citation

Ono, Yukako and Aarland, Kristin and Davis, James C. and Henderson, J. Vernon, Spatial Organization of Firms (December 2003). Available at SSRN: https://ssrn.com/abstract=486970

Yukako Ono (Contact Author)

Federal Reserve Bank of Chicago ( email )

230 South LaSalle Street
Chicago, IL 60610
United States
312-322-5942 (Phone)

Kristin Aarland

Brown University - Department of Economics ( email )

64 Waterman Street
Providence, RI 02912
United States

James C. Davis

US Census Bureau ( email )

National Bureau of Economic Research
1050 Massachusetts Ave.
Cambridge, MA 02138
United States

J. Vernon Henderson

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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