Global Cities, Connectivity, and the Location Choice of MNC Regional Headquarters

Abstract

Regional headquarters (RHQs) perform a crucial bridging function between corporate headquarters, regional affiliates, and other regional actors. Their bridging role and associated connectivity needs lead MNCs to locate their RHQs in highly connected 'global cities'. We examine how the interplay between global city connectivity, geographic distance, and RHQ roles determine the likelihood that particular cities are chosen as a location for MNCs' RHQ investments. Our inferences are based on an analysis of location choices for 1031 RHQs among 48 global cities. We find that while the geographic distance of a global city to the MNC's regional affiliates diminishes the likelihood that a given city is chosen, these distance effects disappear when the global city is highly connected. Well connected global cities, furthermore, attract investment in RHQs by MNCs from more distant countries-oforigin. On average, city connectivity is a more important characteristic for RHQs that have an entrepreneurial role.

Impact of the Intellectual Property Tax Regime on FDI in R&D Activities at the City Level

“…Capital city, size of the city (with a population of 1 million or more), presence of a university included in the THE‐QS ranking list, and availability of an airport are significant at the 1% level. The importance of a top university for the attractiveness of the location for R&D inflows is consistent with findings by Siedschlag and others () and Belderbos, Leten, and Suzuki () at the regional level.…”

“…The previous literature agrees that the available knowledge base—such as scientific infrastructure and educational qualifications of the workforce in the host country—is the main factor in attracting FDI in R&D and related activities (Demirbag & Glaister, ; Doh, Bunyaratavej, & Hahn, ; Hall, ; Rilla & Squicciarini, ). The importance of local universities as a factor for foreign R&D is well documented in the literature (Belderbos, Leten, & Suzuki, ; Belderbos et al, ). Universities play a central role in the build‐up of the local knowledge base.…”

“…Empirical studies find that the scientific strength of local universities is an important factor for the international location choice of R&D (Alcacer & Chung, ; Belderbos, Leten, et al, ; Siedschlag et al, ). For the United Kingdom, Abramovsky, Harrison, and Simpson () demonstrate that foreign‐owned R&D laboratories are located in the proximity of university research centers.…”

“…The data consist of greenfield FDI in R&D and related activities originating from the fDi Markets database for about 1,200 cities. The analysis is performed at the city rather than the firm or cross‐country level, because large and global cities are preferred locations for R&D activities of multinational enterprises (Arauzo‐Carod & Viladecans‐Marsal, ; Belderbos, Du, & Goerzen, ; Castellani & Lavoratori, ). Calculations based on the fdi Markets for the period 2003–11 show that large cities with a population of 500,000 inhabitants or more account for two thirds of the FDI projects in R&D and related activities.…”

A Novel way to Compare Health Care Systems and to Assess their Potential Competitiveness

“…It thereby also provides an indication of health care systems' potential competitiveness. This is increasingly becoming an issue as multinational companies choose to locate their headquarters with a view to ensuring a good quality of life for their managers, which includes good‐quality health care (Belderbos et al ). In the European Union (EU), the European Court of Justice in Kohll and Decker ruled as early as 1998 that not only socially insured migrant workers but citizens in general have the right to obtain medical treatment in any other EU country, thus raising the spectre of competition between national health care systems (Mossialos et al ).…”