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Why Do Some Multinational Corporations Relocate Their Headquarters Overseas?

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Author Info
Birkinshaw, Julian () (London Business School,)
Braunerhjelm, Pontus () (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
Holm, Ulf () (Department of Business Studies, Uppsala University,)
Terjesen, Siri () (Cranfield School of Management)

Additional information is available for the following registered author(s):

Abstract

This paper examines the decision by a multinational corporation (MNC) to relocate its business unit and/or corporate HQ overseas. We argue that business unit HQs move overseas in response to changes in the internal configuration of their unit’s activities and the demands of the product markets in which they operate, whereas corporate HQs move overseas is response to the demands of external stakeholders, in particular global financial markets and shareholders. Using data on 125 business unit HQs and 35 corporate HQs, we test and find support for these arguments. The research highlights important differences between corporate- and business-level strategy, and it suggests ways in which the theory of the MNC needs to be reconsidered.

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Publisher Info
Paper provided by Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies in its series Working Paper Series in Economics and Institutions of Innovation with number 54.

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Length: 40 pages
Date of creation: 28 Mar 2006
Date of revision:
Handle: RePEc:hhs:cesisp:0054

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Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden
Phone: +46 8 790 95 63
Web page: http://www.infra.kth.se/cesis/
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Related research
Keywords: Multinational Corporation Headquarters Corporate Strategy Internationalization

Find related papers by JEL classification:
D21 - Microeconomics - - Production and Organizations - - - Firm Behavior
F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives
O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes

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References listed on IDEAS
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    Other versions:
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    Other versions:
  7. Alan M Rugman & Alain Verbeke, 1992. "A Note on the Transnational Solution and the Transaction Cost Theory of Multinational Strategic Management," Journal of International Business Studies, Palgrave Macmillan Journals, vol. 23(4), pages 761-771, December. [Downloadable!] (restricted)
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