WHY DO SOME MULTINATIONAL CORPORATIONS RELOCATE THEIR HEADQUARTERS OVERSEAS?

Julian Birkinshaw (), Pontus Brodde Braunerhjelm (), Ulf Holm () and Siri Terjesen ()
Additional contact information
Julian Birkinshaw: London Business School,, Postal: Regents Park, London NW1 4SA United Kingdom,
Ulf Holm: Department of Business Studies, Uppsala University,, Postal: Box 513, SE 751 20 Uppsala Sweden

No 54, Working Paper Series in Economics and Institutions of Innovation from Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

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.

Keywords: Multinational Corporation; Headquarters; Corporate Strategy; Internationalization (search for similar items in EconPapers)
JEL-codes: D21 F23 G34 L22 O31 O33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec and nep-fin
Date: 2006-03-28
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Persistent link: http://EconPapers.repec.org/RePEc:hhs:cesisp:0054

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