Journal article
Too Far Away? The Effect of Distance to Headquarters on Business Establishment Performance
American economic journal. Microeconomics, Vol.5(3), pp.157-179
08/01/2013
DOI: 10.1257/mic.5.3.157
Abstract
In the population of over 1.7 million Texan sales-tax collecting business establishments, we show that greater distance to owner headquarters is associated with shorter establishment longevity. For the lodging industry, where we have revenue data, increases in distance to headquarters due to HQ-moving owners or acquisitions are associated with reductions in revenues per room. We argue that this detrimental distance effect is robust and causal, arising even when we control for the potential endogeneity of HQ distance using instrumental-variable and matched-pair analyses. We interpret this as evidence of monitoring and local information asymmetry problems for distant owners. (JEL D82, G34, L25, R32)
Details
- Title: Subtitle
- Too Far Away? The Effect of Distance to Headquarters on Business Establishment Performance
- Creators
- Arturs Kalnins - School of Hotel Administration, Cornell University, 545D Statler Hall, Ithaca, NY 14853-6902Francine Lafontaine - Stephen M. Ross School of Business, University of Michigan, 701 Tappan St., Ann Arbor, MI 48109-1234
- Resource Type
- Journal article
- Publication Details
- American economic journal. Microeconomics, Vol.5(3), pp.157-179
- DOI
- 10.1257/mic.5.3.157
- ISSN
- 1945-7669
- eISSN
- 1945-7685
- Language
- English
- Date published
- 08/01/2013
- Academic Unit
- Management and Entrepreneurship
- Record Identifier
- 9984083842002771
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