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Why and where do headquarters move?

Listed author(s):
  • Strauss-Kahn, Vanessa
  • Vives, Xavier

This paper analyzes decisions regarding the location of headquarters in the U.S. for the period 1996-2001. Using a unique [fi]rm-level database of about 30,000 U.S. headquarters, we study the [fi]rm- and location-speci[fi]c 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 signi[fi]cant (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 [fi]rms, and [fi]rms that are the outcome of a merger. Headquarters relocate to metropolitan areas with good airport facilities--with a dramatic impact, low corporate taxes, low average wages, high level of business services, same industry specialization, and agglomeration of headquarters in the same sector of activity--with all agglomeration variables having an important and signi[fi]cant impact.

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File URL: http://www.sciencedirect.com/science/article/pii/S0166-0462(08)00103-8
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Article provided by Elsevier in its journal Regional Science and Urban Economics.

Volume (Year): 39 (2009)
Issue (Month): 2 (March)
Pages: 168-186

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Handle: RePEc:eee:regeco:v:39:y:2009:i:2:p:168-186
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