Impact of Headquarters Relocation on the Operating Performance of the Firm

Richard Gregory, John R. Lombard and Bruce Seifert
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Richard Gregory: University of South Carolina Upstate
John R. Lombard: Old Dominion University
Bruce Seifert: Old Dominion University

Economic Development Quarterly, 2005, vol. 19, issue 3, 260-270

Abstract: Communities often compete fiercely for corporate headquarters relocations. Although headquarters relocations affect both the losing and winning communities, the authors investigate only the impact of corporate headquarters relocation on the subsequent financial performance of the firm. Prior research using event study methodology suggests that headquarters relocation announcements, when controlling for motivation of relocation, significantly affect short-term stock market reactions. Unlike previous research in this area, the authors use an industry-matched-firm comparison and investigate the impact of relocation on select performance indicators over a 6-year period surrounding the relocation. Using a sample of 167 corporate headquarters relocations during the 1990s, they find little evidence of improved operating performance after headquarters relocation. They also test for the influence of distance as a factor and find that the distance relocated has no significant impact.

Keywords: headquarters relocation; office location; economic development (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:ecdequ:v:19:y:2005:i:3:p:260-270

DOI: 10.1177/0891242405276360

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