The location of the U.S. computer and semiconductor industries: An application of discrete choice models

This study investigates the organizational and geographic dynamics of the United States computer and semiconductor industries. Using neo-classic economic theory, this dissertation developed a theoretical framework to integrate the individual firm's locational choice behavior with the resulting geographic patterns of industries. A discrete choice model was derived which related a firm's economic characteristics to its locational behavior and produced a comprehensive description of macro spatial patterns resulting from micro choice behavior of industrial firms.;The geography of the computer and semiconductor industries was marked by a twofold pattern of agglomeration and dispersal. The locational focus of headquarters and R&D units, as well as leading-edge, prototype, custom productive activities is in larger metropolitan areas with their stock of rich agglomeration economies. However, a more dispersed pattern of production was observed in relatively small urban settlements with cheap labor where most of routinized mass production occurred. This macro geographic pattern was the result of the locational choice of individual facilities driven by a profit maximization rule. Estimated results of discrete choice models show that firm location or technology choice were systematically related to some of the variables suggested by the economic and industrial location theories. (1) Agglomeration economies including both urbanization economies and localization economies are among the most important factors affecting the locational decisions of these firms. (2) Available professional expertise was a more important factor than a production labor pool in attracting headquarter and R&D facilities to metropolitan areas. (3) High labor cost in large cities appeared not to be the factor repelling a firm's location. (4) A facility's size was negatively related to its city size location. Large branch establishments were more likely to locate in a small place. Small plants were more attracted to large cities for their external economies advantage. (5) There was a statistically significant link between the local business climate, the amount of military contract, and a firm's location decision.;The research demonstrated a new approach to the study of industrial location and revealed the prospect of integrating micro behavior theory with macro geographic patterns.