Underlying dimensions of business location decisions

Most previous studies dealing with business site selection decisions have been theoretical and mainly concerned with cost factors. There are many variables other than cost, some of which are qualitative and intangible in nature. This study attempts to provide empirical evidence on the importance of cost and other location‐related variables. The 84 fastest‐growing businesses in New England and New York were surveyed utilizing 27 variables associated with location decisions. Most of the 27 variables are industry‐specific and their importance varies from industry to industry. Factor analysis, using principal component extraction method and varimax rotation showed that there are six underlying dimensions considered in business site selection decisions. Cities and towns can benefit from utilizing the findings of this type of research in attracting new businesses and preventing the existing businesses from leaving for other locations.