UC Economics Center Report Shows Queen City Is King of the Midwest for Fortune 500 HQs

Intuitively, most people would guess that having Fortune 500 companies headquartered in a city would be beneficial to a city. The

Economics Center for Education & Research

at the University of Cincinnati (UC) functions on more than just intuition, however, and has recently released its update to the Fortune 500 Benefits Index.

And the news is good for Cincinnati.

With an index of 183.3, the Cincinnati metropolitan statistical area (MSA) (which includes Middletown) ranks higher than Indianapolis, Columbus and Akron (indices of 176.9, 170.4 and 159.1, respectively).

In 2006, the Economics Center for Education & Research released its first Fortune 500 Benefits Index presenting an analysis of the benefits of having Fortune 500 corporate headquarters in a region. Now, with this update, the report again attempts to quantify the many benefits that Fortune 500 companies’ headquarters extend to a region’s quality of life.

Fortune 500 companies bring the culture of corporate giving in the region. The companies and their employees tend to support many local charities and public endowment programs. These businesses also encourage the arts, culture, sports and recreation activities in many ways.

To quantify the relationship between the presence of Fortune 500 company headquarters and a region’s quality of life, UC researchers from the College of Business first identified those characteristics of a region that are associated with quality of life, such as education, culture, leisure activities, health services and transportation.

Then they calculated an index number for each characteristic by comparing the region’s measurement to the national average (and multiplying by 100). For example, the Chicago-Naperville-Joliet (IL) metropolitan library has 3.75 books per person while the national average is only 2.78. Therefore, the library index value for the Chicago MSA is 134.9.

Following are some highlights from the report:

• The Cincinnati MSA shows higher values than the national averages for six variables that comprise the index. These variables are classical music rating, professional theater rating, arts radio rating, amusement park rating, botanical garden/ arboretum rating and zoo aquarium rating.
• Cincinnati MSA ranks 24th on the benefits index among the top 35 MSAs nationally, with 10 Fortune 500 companies headquartered in the Greater Cincinnati area. 
• Cincinnati ranks ninth among the cities comparable to our size.
• The concentration of Fortune 500 company headquarters has positive impacts on higher education, transportation, healthcare services and many cultural and leisure activities through museums, golf courses and sports teams.

FORTUNE 500 COMPANIES IN THE CINCINNATI MSA

1. Procter & Gamble
2. Kroger Company
3. Federated Department Stores
4. Ashland
5. Fifth Third Bancorp
6. Omnicare
7. AK Steel Holding
8. Western & Southern Financial
9. Cincinnati Financial
10. Chiquita Brands International

Cincinnati might be smaller than Chicago, New York or Los Angeles, but it is certainly denser when it comes to Fortune 500s. When comparing the number of Fortune 500 companies to the general population size, it beats all three — which are the top three MSAs on the benefits index: 

• Cincinnati: 4.85 companies per million of its population
• New York: 4.48 (ranked 2nd)
• Chicago: 3.04 (ranked 1st)
• Los Angeles: 1.68 (ranked 3rd)

The Economics Center for Education & Research at the University of Cincinnati celebrates its 30th anniversary with a luncheon at the Hyatt Regency in downtown Cincinnati on March 4. The non-profit center was established with the vision of building a vibrant community by inspiring students to appreciate and use their economic freedom and opportunities, and by equipping decision makers with sound economic analyses.