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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
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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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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  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. [Downloadable!]
  2. Zoltan J. Acs & Siri Terjesen, 2007. "Born Local: Two Avenues to Internationalization," Jena Economic Research Papers in Economics 2007-022, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics, Thueringer Universitaets- und Landesbibliothek. [Downloadable!]
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