Corporate Role of New York City in the Metropolitan Hierarchy

Abstract

This article examines two related components of the preeminence of New York City as a concentration of corporate headquarters: the spatial own- ership links between major corporations with headquarters in the city and their subsidiaries, and the links between subsidiaries located in the city and the sites of their parent firms. New York City-based parent companies locate their sub- sidiaries primarily in the largest metropolitan centers, irrespective of distance. Parent firms with subsidiaries in the city have headquarters near it, are in both small and large metropolitan centers, and are more likely than New York-based firms to be in relatively isolated centers. IT is well known that the New York metropolitan area is the dominant corporate command-and-control center in the urban system of the United States. The role of the city as a focus of corporate headquarters and the degree to which decisions made there reverberate throughout the system and the world have been widely studied. The purpose of this article is to examine, in the context of the American urban hierarchy, the spatial own- ership links between major corporations with headquarters there and their subsidiaries, the connections between subsidiaries there and the sites of parent firms, and the degree to which these links are biased by distance. The population size of a metropolitan area is the surrogate for market sales level and, in general, corporate infrastructure. Because New York City is the principal command-and-control center in the United States and thus stands at the highest level of the urban hierarchy, one task is to establish how the city is tied spatially to the rest of the metropolitan hierarchy. Data are from Dun and Bradstreet (1989) and include all parent companies that had 1988 assets greater than one-half million dollars, that conducted business from two or more locations, and that either had headquarters in Manhattan and owned one or more subsidiaries or had headquarters elsewhere but had subsidiaries in the borough. In this sense, the use of New York City in this article is synonymous with Manhattan. CONCEPTUAL FRAMEWORK As telecommunications technology continues to improve and as the use of technology becomes increasingly commonplace, the intraorganizational and multilocational structure of corporations takes on new configurations (Hepworth 1990). The long-term trend toward time-space convergence ap- plies not only to cities but also to multilocational firms and highlights the reduced importance of distance. Nevertheless, direct, face-to-face contacts