Business Location Decisions in the Medical Device Industry

Abstract

Medical device firms, like firms in the high-technology sector, often include business functions characteristic of both the industrial economy and the knowledge economy. Thus, it is not immediately clear which kinds of locational attributes (i.e., traditional cost-based factors or those concerned with attracting and retaining knowledge workers) are most influential in the site selection process. This study draws on survey data from 48 medical device firms in Massachusetts, a state with one of the largest clusters in the industry, to examine the relative importance of various factors and conditions in the location decision. A second objective is to consider the extent to which the rating of a given location factor varies depending on whether the firm maintains manufacturing facilities in the state. The implications of the findings for both location theory and economic development efforts are discussed.