We empirically study the spatio-temporal location problem motivated by an online retailer that uses the Buy-Online-PickUp In Store fulfillment method. Customers pick up their orders from trucks parked at specific locations during specific times, and the retailer's problem is to determine where and when these pickups occur. We combine demographic and economic data, business location data, and the retailer's historical sales and operations data to predict demand at potential locations. We introduce a novel two step procedure that combines machine learning and econometric techniques. First, we use a random forests algorithm to predict demand when a particular location operated in isolation. Then, we use a fixed effects regression to estimate spatial and temporal cannibalization effects that cannot be captured in the first step. Based on the predicted demand, we develop heuristics to improve the pickup location configuration and schedule. We estimate a 36% increase in revenue from the improved location configuration and schedule.

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We study the effect of proximity to corporate headquarters on the productivity of inventors and research and development (R&D) facilities. Distant inventors and R&D facilities are less productive, and plausibly exogenous reductions in the travel time from these inventors or facilities to headquarters increase their productivity and creativity. We hypothesize that these improvements in the management of innovation production occur because proximity improves monitoring, managerial ability to provide direction, relationship building that supports creativity, and information exchange, including advice from headquarters. Consequently, our results suggest that proximity can help managers balance both exploration and exploitation when overseeing innovation. Naturally, these results then beg the question of why firms do not locate all inventors and R&D facilities in close proximity to headquarters. We find that distant inventors and R&D facilities are located in areas with better general economic indicators, and especially more favorable tax rates, than headquarters, suggesting firms balance these benefits against the benefits of proximity when locating innovation production. This paper was accepted by Brian Bushee, accounting.

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