Underlying dimensions of business location decisions

Abstract

Most previous studies dealing with business site selection decisions have been theoretical and mainly concerned with cost factors. There are many variables other than cost, some of which are qualitative and intangible in nature. This study attempts to provide empirical evidence on the importance of cost and other location-related variables. The 84 fastest-growing businesses in New England and New York were surveyed utilizing 27 variables associated with location decisions. Most of the 27 variables are industry-specific and their importance varies from industry to industry. Factor analysis, using principal component extraction method and varimax rotation showed that there are six underlying dimensions considered in business site selection decisions. Cities and towns can benefit from utilizing the findings of this type of research in attracting new businesses and preventing the existing businesses from leaving for other locations.

Anticipating a New Railway: The Relevance of Transit-Oriented Development to Businesses in a Car-Oriented City

“…The general conclusion is that 'cost' is the primary determining factor in location choice (Wendt, 1972;Karakaya & Canel, 1998). This is followed by decisions based around proximity and accessibility, particularly so when local investment and state regulatory environment factors are removed from the analysis (Karakaya & Canel, 1998). In addition, in relation to small businesses, lifestyle and personal factors influence the location decision process including the presence of recreational facilities, preferred residential areas, areas with quality schools, and suburbs away from larger cities and crime (Wendt, 1972;Love & Crompton, 1999).…”

“…In Anticipating a New Railway 153 identifying the locational attributes that business professionals use when choosing to locate their business operations, Karakaya and Canel, drawing on empirical research of businesses based on the eastern seaboard of the USA, state that the location decision "should be consistent with the long term strategic direction of the firm" (1998, p. 323), and more importantly, these decisions should place the business in a location that gives it competitive advantage (1998, p. 323). The general conclusion is that 'cost' is the primary determining factor in location choice (Wendt, 1972;Karakaya & Canel, 1998). This is followed by decisions based around proximity and accessibility, particularly so when local investment and state regulatory environment factors are removed from the analysis (Karakaya & Canel, 1998).…”

Local Investment Incentives for Urban Economic Development: Recent Debates in South African Cities

“…From the existing-mainly US-material, the evidence is undoubtedly mixed. Certain researchers examining the underlying dimensions of business location decisions point to the limited importance of incentives for attracting new investment (Eisinger 1988;Karakaya and Canel 1998). Bartik (1995) avers many location decisions are unchanged by incentives.…”

A comparison of location factors evaluation in the secondary and tertiary sectors

“…Several recent studies confi rmed the fact that a correct localization may be a determining factor for competitiveness of the given economic entity. [18] …”