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Why and Where do Headquarters Move?

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  • Strauss-Kahn, Vanessa
  • Vives, Xavier

Abstract

This paper analyses decisions regarding the location of headquarters in the US for the period 1996-2001. Using a unique firm-level database of about 30,000 US headquarters, we study the firm- and location-specific characteristics of headquarters that relocated over that period. Headquarters are concentrated, increasingly so in medium-sized service-oriented metropolitan areas, and the rate of relocation is significant (5% a year). Larger (in terms of sales) and younger headquarters tend to relocate more often, as well as larger (in terms of the number of headquarters) and foreign firms, and firms that are the outcome of a merger. Headquarters relocate to metropolitan areas with good airport facilities, low corporate taxes, low average wages, high level of business services and agglomeration of headquarters in the same sector of activity.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5070.

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Date of creation: May 2005
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Handle: RePEc:cpr:ceprdp:5070

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Keywords: agglomeration externalities; business services; communication costs; congestion; corporate history; mergers; nested logit; taxes;

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References

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Citations

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Cited by:
  1. Stefania Vitali & Mauro Napoletano & Giorgio Fagiolo, 2009. "Spatial Localization in Manufacturing: A Cross-Country Analysis," Documents de Travail de l'OFCE 2009-07, Observatoire Francais des Conjonctures Economiques (OFCE).
  2. Helge Berger & Michael Ehrmann & Marcel Fratzscher, 2006. "Forecasting ECB Monetary Policy: Accuracy Is (Still) a Matter of Geography," IMF Working Papers 06/41, International Monetary Fund.
  3. Berger, Helge & Ehrmann, Michael & Fratzscher, Marcel, 2008. "Geography or skills: what explains Fed Wachters' forecast accuracy of US monetary policy?," Discussion Papers 2008/11, Free University Berlin, School of Business & Economics.
  4. Fabrice Defever, 2010. "The Spatial Organization of Multinational Firms," CESifo Working Paper Series 3304, CESifo Group Munich.
  5. Marius Brülhart & Kurt Schmidheiny, 2011. "Estimating the rivalness of state-level inward FDI," Working Papers 2011/36, Institut d'Economia de Barcelona (IEB).
  6. Johannes Voget, 2010. "Headquarter Relocations and International Taxation," Working Papers 1008, Oxford University Centre for Business Taxation.
  7. Miguel C. Manjon-Antolin & Josep Maria Arauzo-Carod, 2006. "Locations and Relocations: Modelling, Determinants, and Interrelations," ERSA conference papers ersa06p33, European Regional Science Association.
  8. Lars Calmfors & Giancarlo Corsetti & Michael P. Devereux & Seppo Honkapohja & Gilles Saint-Paul & Hans-Werner Sinn & Jan-Egbert Sturm & Xavier Vives, 2007. "Chapter 6: Economic nationalism," EEAG Report on the European Economy, CESifo Group Munich, vol. 0, pages 133-147, 02.
  9. Fabrice Defever, 2006. "Functional fragmentation and the location of multinational firms in the enlarged Europe," Cahiers de la Maison des Sciences Economiques bla06052, Université Panthéon-Sorbonne (Paris 1).
  10. Matthias Deschryvere, 2009. "Mobility of Corporate Headquarter Functions: A Literature Review," Discussion Papers 1203, The Research Institute of the Finnish Economy.
  11. Eckhardt Bode & Franz-Josef Bade Bade & Eleonora Cutrini Cutrini, 2011. "Domestic and International Offshoring of Tasks," ERSA conference papers ersa11p1840, European Regional Science Association.
  12. Lars Calmfors & Giancarlo Corsetti & Michael P. Devereux & Gilles Saint-Paul & Hans-Werner Sinn & Jan-Egbert Sturm & Xavier Vives, 2008. "Chapter 4: Industrial policy," EEAG Report on the European Economy, CESifo Group Munich, vol. 0, pages 105-124, 02.
  13. Kronenberg, Kristin, 2011. "Firm relocations in the Netherlands: Why do firms move, and where do they go?," MPRA Paper 32147, University Library of Munich, Germany.
  14. Renato Redondi & Mariasole Bannò & Marco Mutinelli, 2011. "Air Connectivity and Foreign Direct Investments The economic effects of the introduction of new routes," ERSA conference papers ersa11p249, European Regional Science Association.
  15. Miguel Manjón-Antolín & Josep-Maria Arauzo-Carod, 2011. "Locations and relocations: determinants, modelling, and interrelations," The Annals of Regional Science, Springer, vol. 47(1), pages 131-146, August.

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