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Cross-border relocations of headquarters in Europe
Journal
Journal of International Business Studies
ISSN
0047-2506
ISSN-Digital
1478-6990
Type
journal article
Date Issued
2012-02
Author(s)
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.
Language
English
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
Palgrave Macmillan
Publisher place
Basingstoke UK
Volume
2012
Number
43
Start page
187
End page
210
Pages
24
Subject(s)
Division(s)
Eprints ID
219927