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For country sepecific search hosting location plays role?

I have heard that you get better result if you host your site on the country you are targetting for example if you want you site to rank well for UK search, it will be better ranked if hostng in UK and not US.
 
I think there lies a weekness in the logic if hosting country is considered as a parameter to rank site in the result page.

Say my site is hosted in uk , while my competitors are in my country. But as quality their site are below than mine. Due to the factor mine will not be listed in the result as its hosted outside

The whole purpose is to return the best site always. In that case i think for some way they should consider business address given in host or domain would be better to consider.
 
Your site will be returned in SERP as well, it just may be listed higher if its hosted in your country than if its hosted in UK, this is what Google recommends.
But I have seen at forum that people just increase the us of the country name in their text to counter this for example, if my site is hosted in US and I want to be ranked well for UK keywords, I will just add for example "UK webmaster forums" and "webmaster forums uk" in my text as often as possible.
 
Where it will make a difference is if the users selects to search just within their own country.

For example, I run a couple of successful .com's that are hosted in the US but which target the UK. I recently moved the .co.uk versions of these off of the US server and put them on a UK-based server.

Previously if someone searched for one of my keyword phrases and specified 'from the UK', my .co.uk's ranked on the second page. Now they are in the top 3 of teh first page - simply by change the server location.

Google is using the IP address of the server to work out which country the server is in and then using that to filter the SERPs. It's certainly the case that it's worth hosting in the countries that you're targetting but this can get expensive.
 
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