Doctoral dissertation: Finland falling behind in competition for foreign regional headquarters
Multinational companies centralize their management activities on regional headquarters which are responsible for several countries, such as the Nordic Countries or Eastern Europe. The location of regional headquarters has a significant impact on the country in which it is located, as such offices offer well-paid jobs. The countries also benefit from a good reputation as a target of investment, which is why there is competition among target countries. This phenomenon is studied by Iiris Saittakari, Master of Science in Economics and Business Administration, in her doctoral dissertation in the field of international business, which is under review at the Aalto University School of Business.
'The relocation of the headquarters of Nordea Bank brought the issue into the headlines. However, the relocation of a corporate headquarters from one country to another is still fairly rare – they are often located in the home country of the multinational company', Saittakari explains. 'Regional headquarters, meanwhile, are easy to move from one country to another and doing so can bring considerable savings to a company.'
Finland has traditionally been an attractive country for regional headquarters, because of trade with Russia. However, only 60 percent of the regional headquarters located in Finland in the late 1990s were allowed to retain their status either partly or fully by 2010. The results of this longitudinal study show that especially large and sales focused Finnish subsidiaries were allowed to hold on to their responsibility as regional headquarters. Regional headquarters have often been moved closer to the countries of responsibility - Russia, the Baltic Countries, or Poland. Several regional headquarters have also been moved from Finland to Sweden.
'Regional headquarters are primarily sales offices, so they benefit from the proximity of large buyers and resellers. Finland's export-driven industrial companies do not attract regional headquarters to Finland', says Iiris Saittakari, summing up the results of her study.
Iiris Saittakari's dissertation 'The location of headquarters: why, when and where are regional mandates located?' will be reviewed at the Aalto University School of Business on 4 May at 12.00 noon.
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