Why and where do headquarters move?

This paper analyzes decisions regarding the location of headquarters in the U.S. for the period 1996—2001. Using a unique firm-level database of about 30,000 U.S. headquarters, we study the firm- and location-specific characteristics of headquarters that relocated over that period. Head-quarters are concentrated, increasingly so in medium-sized service-oriented metropolitan areas, and the rate of relocation is significant (5 % a year). Larger (in terms of sales) and younger head-quarters tend to relocate more often, as well as larger (in terms of the number of headquarters) and foreign firms, and firms that are the outcome of a merger. Headquarters relocate to metropolitan areas with good airport facilities, low corporate taxes, low average wages, high level of business services and agglomeration of headquarters in the same sector of activity