Economics of Headquarters and FDI to Host Countries

The Research in the book analyzes empirically the economic importance of corporate headquarters and headquarters functions, and FDI to host countries, with a focus on Canada. Towards this goal, the book first looks at the nature, scope and mobility of headquarters and headquarters functions in general. Next, using Canadian industry data estimates the economic impact of corporate headquarters and their functions, and inward FDI in Canada. The empirical estimates suggest that inward FDI has a significant positive impact on investment and innovation, trade, productivity, net job creation and real incomes, and these impacts are much bigger than the impacts of headquarters and their functions. These findings imply that highly competitive business and market framework policies and business incentives, and the removal of formal and informal barriers to inward FDI in the host country would both attract and retain FDI and headquarters and their functions, and significantly improve its economic performance.