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INTRODUCTION
Headquarters (HQ) location choices have received increasing attention in research on economic and regional development (e.g., Klier, 2006; Strauss-Kahn & Vives, 2009), but there is surprisingly little research in international business journals on the dynamics of HQ relocations, even though HQ have otherwise been under active investigation (e.g., Ciabuschi, Forsgren, & Martin, 2011; Collis, Young, & Goold, 2007). Yet a decision to relocate HQ can be regarded as the ultimate international business decision, where a firm's historical roots are revisited and challenged in order to optimize the firm's global operations. Forsgren, Holm, and Johanson (1995) even call the relocation of HQ the "third degree of internationalization". Accordingly, the first degree of internationalization takes place through the transfer of sales and marketing and R&D functions abroad. The second degree of internationalization takes place when the subsidiaries develop into stronger centers that are able to take on international responsibilities in their own areas. Finally, the relocation of HQ is the third degree in the process of increasing international involvement.
Whereas earlier research has documented various factors contributing to the relocation of either divisional HQ (Barner-Rasmussen, Piekkari, & Björkman, 2007; Benito, Lunnan, & Tomassen, 2011; Forsgren et al., 1995) or corporate HQ (Birkinshaw, Braunerhjelm, Holm, & Terjesen, 2006) from a small country setting (Finland, Norway, and Sweden) to other countries, or has focused on purely domestic HQ relocations (e.g., Klier, 2006; Strauss-Kahn & Vives, 2009), we examine corporate and regional HQ relocations where both home and target countries vary. The ability to also vary the originating home country provides us with the opportunity to study factors that affect the balance of attractiveness between different locations. This enables us to develop an improved understanding of how the different push and pull factors and various catalyzing factors can jointly contribute to an eventual relocation decision.
Moreover, prior research on international HQ relocations has tended to focus predominantly on the effects of different firm-specific characteristics, such as the type of ownership, the extent of international involvement, and the relationship between the corporate HQ and divisions (Benito et al., 2011; Birkinshaw et al., 2006; Forsgren et al., 1995). We extend the existing research by incorporating a broader range of country-specific contextual variables that characterize the different home- and target-country locations.
Our...