What types of firms relocate their headquarters ?

Abstract

In 2017 under the trump administration, TCJA was passed for many goals such as economic growth and increasing domestic investments and repatriation of offshore earnings. Of the changes that were made are lowering the personal/corporate income tax, and a movement toward a territorial system of corporate income taxation. One of the reasons for this is to motivate companies headquartered in the US to remain there and others to relocate to it. This research investigates the types and characteristics of firms that relocate their headquarters in the US. Using two types of models, the study analyzes data for companies spanning from 2017 until 2023. The first findings reveal that younger firms with a high number of subsidiaries, low ROE and debt-to-equity ratios, while revenue and number of employees have little to no impact. While the findings using the second model go more in depth about the characteristics by giving estimations for each variable of the firms that relocate. The study also indicates that companies in industries such as technology, manufacturing and software are more likely to relocate their headquarters than other ones.