One country, one system? Dynamics of headquarter relocations in Hong Kong
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School of Business |
Master's thesis
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Date
2023
Department
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Mcode
Degree programme
Global Management
Language
en
Pages
92+16
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Abstract
Hong Kong, once renowned as a prominent international business hub and a preferred location for Asian regional headquarters of multinational corporations, has witnessed a wave of headquarter relocations away from the city amidst the changing political landscape and other upheavals caused by global uncertainties. The wave of relocations has garnered attention due to its multifaceted nature and the complex dynamics faced by the headquarters. This thesis investigates the dynamics surrounding headquarter relocations from Hong Kong, aiming to identify the primary factors driving companies to relocate their regional headquarters, and to understand the factors influencing the form of the relocation. Employing a mixed methodology combining quantitative and qualitative data analysis, the study examines the five-year timeframe of 2018-2022, utilizing government-published data, reports by the European Chamber of Commerce and American Chamber of Commerce in Hong Kong, and a collection of 72 media articles. The key findings reveal that headquarter relocations from Hong Kong are influenced by different push, pull, and catalyzing factors. The push dynamics include anti-epidemic measures and unfavorable market conditions, while the pull dynamics are attributed to the growing significance of the Chinese market and shifts in companies’ strategies. Additionally, the research uncovers the catalyzing effects of political problems and firms’ mimicking behavior, intensifying the impact of both push and pull factors on relocation decisions. Furthermore, the research demonstrates that companies in Hong Kong choose between full and partial relocation based on the complexity of their organizational structure, the size of the company, and their international coverage. In conclusion, the research sheds light on the evolving business landscape of Hong Kong, where companies must navigate a complex set of dynamics while operating in a politically sensitive environment amid China’s increasing influence over the region. By delving into the factors and forms of headquarter relocations from Hong Kong, this study offers essential guidance to corporations and policymakers as they grapple with the challenges and opportunities associated with headquarter relocations. The research contributes valuable insights to the understanding of corporate decision-making in this dynamic business environment, providing a foundation for informed choices and strategic approaches in managing headquarter relocations.Description
Thesis advisor
Kähäri, PerttuKeywords
headquarter relocations, Hong Kong, political uncertainty, regional headquarters, mixed methodology