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The Decentering of the Global Firm

24 Pages Posted: 7 Oct 2008  

Mihir A. Desai

Harvard Business School - Finance Unit; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: October 1, 2008

Abstract

This paper describes recent changes in the relationship between firms and nation states. Firms are typically linked to the nation in which they began and are considered to have fixed national identities. While firms have reallocated various activities around the world in response to value creation opportunities, they have largely retained their national identities and their headquarter activities remained bundled in their home countries. This characterization is increasingly tenuous. Firms are redefining their homes by unbundling their headquarters functions and reallocating them opportunistically across nations. A firm's legal home, its financial home and its homes for managerial talent no longer need to be colocated and, consequently, the idea of firms as national actors rooted in their home countries is rapidly becoming outdated. The implications for policy makers and researchers are outlined.

Keywords: headquarters, FDI, location, foreign direct investment, multinational, listing, tax

Suggested Citation

Desai, Mihir A., The Decentering of the Global Firm (October 1, 2008). Available at SSRN: https://ssrn.com/abstract=1279535 or http://dx.doi.org/10.2139/ssrn.1279535

Mihir Desai (Contact Author)

National Bureau of Economic Research (NBER)

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United States

Harvard Business School - Finance Unit ( email )

Boston, MA 02163
United States
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617-496-6592 (Fax)

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