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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)

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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Bibliographic 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

Contact details of provider:
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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Keywords: Multinational Corporation; Headquarters; Corporate Strategy; Internationalization;

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References

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Citations

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Cited by:
  1. Vaaler, Paul M. & Schrage, Burkhard N., 2006. "Legal System and Rule of Law Effects on US Cross-Listing to Bond by Emerging-Market Firms," Working Papers 06-0126, University of Illinois at Urbana-Champaign, College of Business.
  2. Randi Lunnan & Youzhen Zhao, 2014. "Regional headquarters in China: Role in MNE knowledge transfer," Asia Pacific Journal of Management, Springer, Springer, vol. 31(2), pages 397-422, June.
  3. Martin Borowiecki & Bernhard Dachs & Doris Hanzl-Weiss & Steffen Kinkel & Johannes Pöschl & Magdolna Sass & Thomas Christian Schmall & Robert Stehrer & Andrea Szalavetz, 2012. "Global Value Chains and the EU Industry," wiiw Research Reports 383, The Vienna Institute for International Economic Studies, wiiw.
  4. Du Rietz, Gunnar & Johansson, Dan & Stenkula, Mikael, 2013. "The Evolution of Swedish Labor Income Taxation in a 150-year Perspective: An In-depth Characterization," Working Paper Series, Research Institute of Industrial Economics 977, Research Institute of Industrial Economics.
  5. Vapola, Terhi Johanna & Paukku, Markus & Gabrielsson, Mika, 2010. "Portfolio management of strategic alliances: An international business perspective," International Business Review, Elsevier, vol. 19(3), pages 247-260, June.
  6. Olischer, Florian Thomas & Dörrenbächer, Christoph, 2013. "Concession bargaining in the airline industry: Ryanair's policy of route relocation and withdrawal," Working Papers 73, Institute of Management Berlin (IMB), Berlin School of Economics and Law.
  7. Dellestrand, Henrik, 2011. "Subsidiary embeddedness as a determinant of divisional headquarters involvement in innovation transfer processes," Journal of International Management, Elsevier, Elsevier, vol. 17(3), pages 229-242, September.
  8. Deschryvere, Matthias, 2009. "Mobility of Corporate Headquarter Functions: A Literature Review," Discussion Papers, The Research Institute of the Finnish Economy 1203, The Research Institute of the Finnish Economy.
  9. Zoltan J. Acs & Siri Terjesen, 2007. "Born Local: Two Avenues to Internationalization," Jena Economic Research Papers 2007-022, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  10. Xiaohua Yang & Siri Terjesen, 2007. "In search of confidence: Context, collaboration, and constraints," Asia Pacific Journal of Management, Springer, Springer, vol. 24(4), pages 497-507, December.
  11. Andersson, Linda & Karpaty, Patik, 2012. "Firm Level Effects of Offshoring of Goods and Services on Relative Labor Demand," Working Papers, Örebro University, School of Business 2013:2, Örebro University, School of Business.

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