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Multi-plant operation and headquarters separation: Evidence from Japanese plant-level panel data

Toshihiro Okubo () and Eiichi Tomiura

Japan and the World Economy, 2016, vol. 39, issue C, 12-22

Abstract: This paper shows (i) under what circumstances corporate headquarters (HQs) are separated from production plants and (ii) what type of plants are operated by multi-plant firms. By analyzing Japanese plant-level panel data from manufacturing census, we find that large-sized plants or plants intensively purchasing materials significantly tend to be separated from HQs and become a part of multi-plant operations. This pattern suggests an impact of managerial burden. We confirm the robustness of our main findings by dynamic switching patterns of plant status. Factors of economic geography, such as distance from core, also have noticeable impacts.

Keywords: Corporate headquarters; Multi-plant operation; Plant size; Plant-level data (search for similar items in EconPapers)
JEL-codes: L22 L23 R32 (search for similar items in EconPapers)
Date: 2016
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