Multi-plant Operation and Corporate Headquarters Separation: Evidence from Japanese plant-level panel data

Author Name OKUBO Toshihiro (Keio University) / TOMIURA Eiichi (Faculty Fellow, RIETI)
Creation Date/NO. January 2016 16-E-002
Research Project Historical Evaluation of Industrial Policies
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This paper attempts to show (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 censuses, 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 suggests a role of managerial capacity. We confirm the robustness of our main findings by the dynamic switching patterns of plant status. Economic geography, such as distance from core, also appears to have impact.

Published: Okubo, Toshihiro, and Eiichi Tomiura, 2016. "Multi-plant operation and headquarters separation: Evidence from Japanese plant-level panel data," Japan and the World Economy, Vol. 39, pp. 12-22