Determining factors of location choice in the modern era : A cross-case analysis on tech companies

Abstract: The emergence of digitalization and globalization has given birth to firms who cater to a global customer base and source resources from around the world at the click of a button. Nevertheless, as companies continue to innovate how they communicate, govern and internationalize, much of the research is built on a world before the emergence of the digitalized and globalized society we live in today. Finding a lucrative market is a crucial source of competitive advantage but if modern opportunities and challenges are disregarded, it could lead to grave economic downfalls. This paper investigates what factors modern technology firms take into account when evaluating potential location choice. This question further investigates how the nature of technology companies influence location choice. A qualitative study was conducted, five semi-structured interviews with five companies were conducted with each interview lasting on average 47 minutes.Three general findings were deducted from these interviews. Firstly, internal factors to the firm are still very much relevant to tech companies. Determinants such as top managements' experiential learning and networks, industry characteristics and the nature of the customer relationship. The second finding was that country-specific determinants were of less importance. There was no evidence showing that determinants such as natural resources were a factor. It was also shown that psychic and geographic distances were of less importance while human capital are of higher importance. Lastly factors which have lowered the barriers to enter a foreign location were found. These include the emergence of the gig economy and better communication technologies allowing for companies to govern distant offices from a centralized headquarter. These findings have been compiled by the authors into a new model of location choice factors for technology companies