Does Tax Drive the Headquarters Locations of the World's Biggest Companies?

Abstract

In recent years, policy makers have given paramount attention to “competitiveness”, working to ensure that domestic economies attract investment, jobs, and tax revenue. Toward this end, countries have steadily lowered corporate tax rates in an attempt to attract mobile international businesses. This paper discusses the desirability this policy stance in light of data on the world’s biggest companies. Using Forbes lists of the “Global 2000” top companies over the period 2003-2017, the paper analyzes companies’ headquarters locations, focusing on economic, geographic, and policy determinants. The paper then relates these findings to larger policy questions.

Keywords: multinational companies, corporate headquarters, international tax, corporate tax

JEL Classification: F23, H25