Headquarter Relocation: Financial Performance and Stock Market Reaction

The paper investigatesreaction of the stock market (NASDAQ and NYSE) to 97 announcements of corporate headquarters relocations in the January 1990-August 2008 period. The results indicate thatthe stock market has no initial reaction to those relocating decisions as a whole, which contradicts with earlier findings. Furthermore, the reaction does not differ for the manufacturing, services, and wholesale/retail sectors of the economy. However, the empirical evidences show that the past financial performance of a corporationinfluenced its decision to relocate headquarter