I
was very interested to read your recent article on the decline of
corporate Melbourne. I’m a transplant from Sydney to Melbourne working
in the areas of corporate law and corporate governance, so the issue of
where businesses choose to locate their headquarters is an interesting
and important one to me.

You note in your article that in
relation to the top 15 ASX companies, Sydney has ten (66.7%) of the
corporate headquarters and Melbourne has three (20%). Interestingly,
this Sydney dominance continues (though to a lesser extent) when one
examines the top 150 ASX companies. The top 150 companies constitute
over 70% of the total ASX market capitalisation. The corporate
headquarters of these top 150 companies are:

Sydney: 77 (51.3%)
Melbourne: 34 (22.7%)
Brisbane: 10 (6.7%)
Perth: 9 (6%)
Adelaide:
4 (2.7%)
Canberra: 1 (0.7%)
Launceston: 1 (0.7%)
Ballarat: 1 (0.7%)
Overseas: 13 (8.7%)

In
addition to the dominance of Sydney, it can also be seen that the
notion of a major listed company having its corporate headquarters
outside a state capital city is virtually non-existent in Australia
(the exceptions being Ballarat and Launceston).

Of course, the
critical issue is why companies choose to locate their headquarters in
one city in preference to others. Factors that may be relevant here
include access to markets and suppliers, the business environment
created by the state government, and issues associated with networking,
to name just a few. Another very important issue is understanding the
extent to which dominance in relation to corporate headquarters is or
is not associated with dominance in relation to other matters.

An
interesting book that examines the history of the growth and
development of large Australian companies (from a national, rather than
state-based, perspective) is The Big End of Town: Big Business and Corporate Leadership in Twentieth Century Australia, by Fleming, Merrett and Ville (Cambridge University Press, 2004).

Peter Fray

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