Central City Versus Suburban Locations of Corporate Headquarters: The Atlanta Example

Southeastern Geographer Vol. 26, No. 2, November 1986, pp. 75-89 CENTRAL CITY VERSUS SUBURBAN LOCATIONS OF CORPORATE HEADQUARTERS: THE ATLANTA EXAMPLE James O. Wheeler It has long been viewed as conventional wisdom that central business districts (CBDs) became the headquarters location of major corporations because of the advantages of central position. (1) The advantages of the CBD include the opportunity for face-to-face communication, access to business (producer) services as well as intrametropolitan accessibility . (2) The powerfully developed infrastructure of the CBD is especially evident in the largest cities which act as headquarters for the largest national and multinational corporations. (3) These major corporations are the driving force in the intermetropolitan exchange of capital , information, and technical expertise, and they act as fundamental players in the evolution of the system of cities for a given region or nation. (4) The 1970s saw a weakening of the continued dominance of the CBD as a headquarters location for major corporations. (5) Especially notable was Quante's study of the exodus of headquarters from New York city to suburbs and satellites in New Jersey, Connecticut, and New York state. (6)Quante found that "[i]t was only recently that a somewhat ominous trend began to appear": "From 139 [of the Fortune 500 firms] in 1967, New York's share of all '500' firms dwindled to 98 by the end of 1974." (7)Most of the departures were to New York suburbs, and few, for example, were to the U.S. South. (8) Future trends in headquarters location in the suburbs and into other metropolitan areas may depend on the evolving role of telecommunications. (9) An emerging feature of the late 1970s and the 1980s has been the development in the suburbs of what were first termed "minicities," later referred to as suburban downtowns, and which are here identified as suburban business districts (SBDs). (JO) Developing around major regional shopping malls at important interchange points are huge, multistory office complexes housing a wide array of service activities, including national and regional offices of major corporations. Even high Dr. Wheeler is the Merle Prunty, Jr., Professor of Geography at the University of Georgia in Athens, GA 30602. 76Southeastern Geographer density residential growth is emerging in these suburban downtowns, with restaurants, entertainment spots, and hotel and convention facilities . These SBDs are duplicating many of the functions of the traditional CBD. PURPOSE AND DATA. This research addresses the question as to what extent major corporate headquarters occupy a central city vis-a-vis a suburban location. Are there basic differences in employment size and annual sales between firms with central city versus suburban headquarters ? Are there differences in the number, characteristics, and location of subsidiaries of the corporations headquartered in central cities and suburbs? Are there differences in the type of economic activities between parent companies in the central city and the suburbs? The data used in this research are taken from Dun and Bradstreet (1985), America's Corporate Families, a listing that includes approximately 8,600 parent companies. (JI) To be included in the listing, the company must conduct business from two or more locations, have a net worth of at least $500,000, and have a controlling interest in one or more subsidiary companies. A subsidiary is a company in which the controlling interest (51 percent or more) is held by another company. This study utilizes the Atlanta metropolitan area and includes 93 parent companies having a total of 474 subsidiaries, of which 197 or 41.6 percent are located in the Atlanta metropolitan area. CONTEXT AND MODEL. Semple and Phipps put forth a four-phase ideal-typical temporal model of inter- and intra-regional location of corporate headquarters, later modified to a six-stage model. (12) These models posit a growing national concentration of corporate headquarters from 1850 to 1950 and a déconcentration from 1950 onwards. In the context of the United States, New York, as the national center, and a few regional centers were initially the primary locations for corporate headquarters. After 1950, the model predicts that New York will find its position gradually eroded, first at the expense of the various regional centers and later at the expense of...