Valuing Headquarters (HQS): Analysis of the Role, Value and Benefit of HQS in Global Value Chains

Abstract

This report explores the growing importance of corporate headquarters in a world of global value chains. It examines the real and purported benefits of hosting corporate headquarters, and recent trends in location and operation of headquarters around the world and in Canada. It concludes with suggestions as to how governments may encourage headquarters to locate in Canada.

Governments around the world are keen to attract headquarters to their jurisdictions for a variety of reasons. Because of the nature of the headquarters function, headquarters typically employ highly-skilled and well-compensated professionals. Headquarters also purchase high-end professional services, notably auditing, management consulting and financial services, as they pursue their corporate mandate. Individuals in these high-end professional services roles are highly coveted by governments as high-end tax payers and consumers within the localities where they work. Their positive economic impact is compounded by the fact that a variety of services jobs are seen to grow up around them, thereby generating significant indirect economic benefits to the localities in which they work. As an added benefit, high-end professionals are also seen as being individuals who are likely to invest substantial time and resources in community development, philanthropy and good works.

Keywords: Valuing Headquarters (HQs), Analysis of the Role, Value and Benefit, Global Value Chains, Dr. Michael Bloom, Michael Grant, Conference Board of Canada

JEL Classification: Z00