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The Decentering of the Global Firm

Mihir A. Desai

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

October 1, 2008

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be colocated and, consequently, the idea of firms as national actors rooted in their home countries is rapidly becoming outdated.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.

Number of Pages in PDF File: 24

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

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Date posted: October 7, 2008  

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

Contact Information

Mihir A. Desai (Contact Author)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Harvard Business School - Finance Unit ( email )
Boston, MA 02163
United States
617-495-6693 (Phone)
617-496-6592 (Fax)
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