The Internal Spatial Organization of Firms: Evidence from Denmark

While multi-establishment firms are an important part of the economy, little is known about their spatial organization. In this article, we study how the location and the occupational composition of establishments within firms has changed during the last 36 years. Using Danish administrative employer-employee data, we present a series of stylized facts regarding the spatial internal organization of firms. We show that the average number of establishments at the firm level increased by 36% during this period. Moreover, the average distance of the establishments and workers to their headquarters has increased by more than 200%. These changes are mainly driven by increases in the average distance of production workers and business service workers, and a higher use of the latter. Finally, we show that the ratio of managers to production and clerical workers within firms has increased, in particular in establishments located in the largest urban municipalities. After presenting the facts, we briefly discuss some of the mechanisms that could be behind these changes.