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The Geography of Logistics Firm Location: The Role of Accessibility

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Abstract

The organization of modern economies is built upon an efficient transport system and an increasing role is played by the logistics sector in overcoming the constraints of time and distance in modern supply chains. While a large body of literature is dedicated to the spatial distribution of firms and firm location choice in general, surprisingly little is still known about the location patterns of logistics firms, and more specifically about the role of accessibility in their location decisions. We use geo-referenced firm level data along with detailed information on transport infrastructure in order to investigate the geography of logistics firms in Spain. We place specific attention to the relationship between logistics firm location, accessibility, and urban structure. Our results show that these firms are located closer to highways and other transport infrastructure compared to other sectors and that the logistics sector is highly urbanized. Yet, they are also locating increasingly in suburban locations and to some extent in extra-urban locations with good accessibility while central cities of urban areas have experienced a declining share of logistics firms.

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Notes

  1. Logistics involves all the move-store activities from the point of raw materials acquisition to the point of final consumption. The present paper adopts a narrower definition of the logistics industry as we do not include transportation operators. We focus on division “52” of the Spanish National Classification of Economic Activities (CNAE-2009) (equivalent to NACE REV2 of EUROSTAT) including warehousing, cargo handling, and support activities for transportation.

  2. The disintegration of production is also called the “international fragmentation of production” (Arndt and Kierzhowsky 2001) and generates growing shares of international trade flows (intermediate and unfinished goods), shipped from one country to another to combine manufacturing or services activities at home with those performed abroad (Helg and Tajoli 2005).

  3. Flexible specialization is based on the flexible use of general purpose machinery by skilled workers able to manufacture a wide range of products for constantly changing markets (Piore and Sabel, 1984), and it requires investments in innovation, JIT, and lean production.

  4. See the Logistics Performance Index (LPI) developed by the World Bank in partnership with academic and international institutions, private companies and individuals engaged in international logistics (see Arnold et al. 2010).

  5. The “logistics floor space” is the floor area of a logistics planned usage, while “industrial floor space” is the floor area of an industrial planned usage. The two may not coincide since the main location determinants of the logistics industry and the manufacturing industry vary with a prevalence of accessibility and cost of land in the first case, and, for instance, market size and labour cost or quality in the second.

  6. Logistics sprawl is defined by Dablanc and Rakotonarivo (2019) as ‘the spatial deconcentration of logistics facilities and distribution centres in metropolitan areas’. For a review see Aljohani and Thompson (2016).

  7. Centrifugal processes were from the urban core to the suburban and ex urban areas of the region, while centripetal processes took place from the margins of the Parisian basin to the edges of the Paris region.

  8. China hosts a logistics market still in its infancy, which creates increasing opportunities for investors, while Italy presents a poor supply of integrated logistics, and a related increasing demand for high value added logistics services (for a review, see Mariotti 2015).

  9. According to the Directorio Central de Empresas (DIRCE), there were 14,484 logistics firms in 2007.

  10. Note, we have used only firms in mainland Spain.

  11. All airports with more than 1 million passengers in 2007 have been included. Alternatively, we have also tested for cargo airports but main results are very similar. All seaports of general interest to the state as outlined in the Ministry of Public Work’s Annual Yearbooks have been included.

  12. We have also tried to estimate hurdle models, however, we were unable to achieve convergence in these models.

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Authors and Affiliations

  1. CSIC, Institute of Public Goods and Policies, c/Albasanz 26-28, 28037, Madrid, Spain

    Adelheid Holl

  2. DAStU-Politecnico di Milano, Via Bonardi 3, 20133, Milan, Italy

    Ilaria Mariotti

Authors
  1. Adelheid Holl
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  2. Ilaria Mariotti
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Correspondence to Adelheid Holl.

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Funding

This research has benefitted from financial support from the Fundación BBVA (I Convocatoria de Ayudas Fundación BBVA a Investigadores, Innovadores y Creadores Culturales).

Appendix

Appendix

Table 6 Review of the main recent empirical contributions on the geography of logistics firm location
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Table 7 Definitions and sources of municipality control variables
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Holl, A., Mariotti, I. The Geography of Logistics Firm Location: The Role of Accessibility. Netw Spat Econ 18, 337–361 (2018). https://doi.org/10.1007/s11067-017-9347-0

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