The correct answer is: yes, but it is not a major factor anymore. Please refer to the another similar post herehere http://moz.com/community/q/can-geographic-location-of-web-server-affect-in-seo
" Server location (through the IP address of the server) is frequently near your users. However, some websites use distributed content delivery networks (CDNs) or are hosted in a country with better webserver infrastructure, so we try not to rely on the server location alone.
Said that, a best practice is to follow one of these options:
- hosting the site in the country targeted;
- using an IP assigned to the targeted country and operate via proxy " - @gfiorelli1
Thanks
Rashesh