Cross-border relocations of headquarters in Europe

Item Type Journal paper
Abstract

This paper analyzes the relocations of both corporate and regional headquarters (HQ) in a multi-country setting. On the basis of a dataset of 52 cross-border HQ relocations in Europe during 1996-2006, we document an increasing trend toward relocation, push and pull factors affecting HQ location choice, and catalyzing factors that affect the relocation decision. High taxes and a high employment rate represent push factors that we find to increase the likelihood of HQ relocation. In particular, at the mean rate of corporate tax, a one percentage point increase in tax translates into a 6.8% increase in HQ relocation likelihood. In contrast, central location and low taxes represent pull factors that increase the attractiveness of the HQ location. In terms of catalyzing factors, we find that export-oriented companies and regional HQ have a higher tendency to relocate. As a whole, we extend the existing research by putting forward a conceptual framework of HQ relocation decisions, and by providing novel empirical evidence on the HQ relocation phenomenon. Our findings contribute to an improved understanding of the determinants of corporate HQ relocation decisions, and provide important tax policy considerations for public policy decision-makers in individual European countries and in the European Commission.

Authors Laamanen, Tomi; Torstila, Sami & Simula, Tatu
Journal or Publication Title Journal of International Business Studies
Language English
Subjects business studies
HSG Classification contribution to scientific community
Refereed Yes
Date February 2012
Publisher Palgrave Macmillan
Place of Publication Basingstoke UK
Volume 2012
Number 43
Page Range 187-210
Number of Pages 24
ISSN 0047-2506
ISSN-Digital 1478-6990
Publisher DOI 10.1057/jibs.2011.52
Depositing User Prof. Dr. Tomi Laamanen
Date Deposited 25 Jan 2013 15:23
Last Modified 23 Aug 2016 11:15
URI: https://www.alexandria.unisg.ch/publications/219927

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Citation

Laamanen, Tomi; Torstila, Sami & Simula, Tatu (2012) Cross-border relocations of headquarters in Europe. Journal of International Business Studies, 2012 (43). 187-210. ISSN 0047-2506

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https://www.alexandria.unisg.ch/id/eprint/219927
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