Determinants of U.S. manufacturing firms’ new location decisions: What factors shape state-level entry?

Abstract

The location of new manufacturing facilities is a critical determinant of firm performance and long-term competitiveness in an increasingly dynamic global economy. This decision-making process is complex, shaped by economic, social, geographic, and regulatory conditions. Understanding these factors is essential for policymakers, investors, and firms seeking to design strategies that foster regional development, job creation, and sustainable economic growth. This study examines the key determinants of manufacturing firms’ new-location choices in the United States. Although factors such as land availability, workforce productivity, and regulatory stability are well recognized, the magnitude and mechanisms through which they affect location decisions remain insufficiently understood. Using data from governmental and industry sources, this analysis investigates how these variables shape site selection. The findings indicate that the density of current establishments and prior business activity strongly predicts new location choices, highlighting the importance of clustering effects in manufacturing expansion. The results show that current business density and firm turnover are the dominant predictors of new entry, while energy costs, public safety, and infrastructure conditions play a statistically consistent but secondary role.

Keywords

manufacturing, location decision, economic factors, cluster effect, regional development

Chinese Abstract

美国制造业企业新厂址选决策的决定因素：哪些因素影响州级市场进入？

在日益动态的全球经济中，新制造工厂的选址是企业绩效和长期竞争力的关键决定因素。这个决策过程十分复杂，受到经济、社会、地理和监管条件的影响。对于寻求制定促进区域发展、创造就业机会和实现可持续经济增长策略的政策制定者、投资者和企业而言，了解这些因素至关重要。本研究检视了美国制造业企业新选址的关键决定因素。尽管土地可用性、劳动生产力和监管稳定性等因素已被广泛认可，但它们影响选址决策的程度和机制仍未被充分理解。本研究利用政府和产业数据，分析了这些变量如何影响选址决策。研究结果表明，现有企业密度和过去的商业活动能够有效预测新厂址的选择，凸显了集群效应在制造业扩张中的重要性。此外，现有企业密度和企业周转率是预测新企业进入市场的主要因素，而能源成本、公共安全和基础设施状况虽然具有统计上的稳定性，但作用较为次要。

制造业﹑区位决策﹑经济因素﹑集群效应﹑区域发展

ORCID Identifiers

Ye Wana Hlaing: https://orcid.org/0009-0008-7779-4458

John Schoeneman: https://orcid.org/0000-0002-5155-1756

DOI

10.5038/2640-6489.11.1.1378

Recommended Citation

Hlaing, Y., & Schoeneman, J. (2026). Determinants of U.S. manufacturing firms’ new location decisions: What factors shape state-level entry?. Journal of Global Business Insights, 11(1), 66-78. https://www.doi.org/10.5038/2640-6489.11.1.1378