Location of business and its effect on business operation and performance

There is some evidence that the location of business has an effect on its profitability. However the issue is not well researched and, while there has been speculation about the reasons for this difference in performance, there appear to be few empirical studies that investigate this issue, and the results are sometimes conflicting. Recent events in Queensland have highlighted the problems associated with attracting professional staff to regional areas, and similar issues have arisen in hiring tradespeople. It might be expected that difficulties in obtaining staff and other resources would contribute to poorer performance, but there may also be differences between city and regional areas in the abilities and motivation of business owners as well as in environment differences that impact on performance. This paper reviews the literature on location and its effects on business performance and identifies areas where future research should be focused in order to develop a better understanding of business development and profitability in regional areas.