Abstract
The main purpose of the paper is to provide a link between the location decision and the internal organization of vertically integrated firms. The results of the model show that the decisions about location and managerial (de)centralization are interdependent: For certain parameters, firms should change both aspects simultaneously as a response to lower communication costs. The positive correlation between the decentralization of decision-making and geographic decentralization predicted by the model is supported by empirical research.
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e Silva, C.E.L., Hewings, G.J.D. Locational and managerial decisions as interdependent choices in the headquarter-manufacturing plant relationship: a theoretical approach. Ann Reg Sci 48, 703–717 (2012). https://doi.org/10.1007/s00168-010-0410-8
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DOI: https://doi.org/10.1007/s00168-010-0410-8