Evaluating the Importance of Business Location Factors: The Influence of Facility Type

This study examines two important issues concerning the evaluation of business location factors. First, in contrast to many analyses that seek to determine the influence of a single factor or set of factors on site selection, this study aims to measure the relative importance of a wide range of factors. Second, it investigates the extent to which the perceived importance of a given location factor varies based on the type of facility in question. While there is a substantial amount of research devoted to identifying industry-specific location factors, little is known about the influence that facility type has on the assessment of location criteria. Drawing on original survey data collected from real estate professionals in the U.S., we found significant differences in the mean ratings for more than half of the 39 location factors on the basis of facility type. In particular, “corporate/office” respondents were significantly more likely than “manufacturing” or “retail” respondents to assign higher ratings to “quality-of-life” location factors, such as crime rates, amenities, housing, and schools. We discuss the implications of these findings for future research on location theory.

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