What Factors affect Information Technology Firm Location Choices in Middle America? An Examination of Regional and Industrial Variation in Kansas

Abstract

The importance of information technologies in regional economic performance is widely accepted but only widely studied in more populous regions in the United States. Local and state development practitioners and policy makers actively court and promote Information Technology (IT)—intensive industries in rural areas. Despite various promotional efforts, relatively little is known about the specific location requirements of such industries, however, especially in lower population areas of the United States such as the mostly rural Midwest. In this article, the authors examine the location choice preferences of firms in three IT industry sectors in metro, metro-adjacent, and nonmetro regions using a highly detailed data set of Kansas industries. The modeling framework combines both conditional logit and Poisson regression models. The results indicate that average establishment size, industry clustering, labor intensity, and county employment growth explain variations in industry location choice preferences across regions.