Why and Where do Headquarters Move?

Xavier Vives and Vanessa Strauss-Kahn

No 5070, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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.

Keywords: Agglomeration externalities; Business services; Communication costs; Congestion; Corporate history; Mergers; Nested logit; Taxes (search for similar items in EconPapers)
JEL-codes: F15 F23 L20 R12 (search for similar items in EconPapers)
Date: 2005-05
New Economics Papers: this item is included in nep-dcm, nep-geo and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

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Related works:
Journal Article: Why and where do headquarters move? (2009)
Working Paper: Why and where do headquarters move? (2006)
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