Size Matters: Multi-plant operation and the separation of corporate headquarters

This paper addresses two questions: i) under what circumstances corporate headquarters are separated from production plants, and ii) what types of plants are operated by multi-plant firms. We examine these issues using plant-level manufacturing census data. This paper has two main findings. Firstly, when a plant is large, productive, or intensive in labor or material use, then the plant tends to be managed by a corporate headquarters that is geographically separated from the plant, and the plant is also more likely to be a part of multi-plant operation. Secondly, there is a substantially greater marginal effect from a change in plant size on the probability of multi-plant operation when plants have around two hundred workers than at the mean.