The benefit of having a headquarters

North Carolina, like most states, is actively engaged in recruiting new businesses. Some experts, however, say all businesses aren’t created equal, that there’s a special benefit to successfully attracting a company headquarters. Why? N.C. State University economist Mike Walden responds.

“And this is a very interesting issue. Some people say that, of course, we want to bring any business to North Carolina that we can. But some say that there’s a special prestige that goes along with bringing a headquarters. And they give a couple of reasons.

“One, headquarters can really locate anywhere. If you’re the headquarters of a company, you can really locate anywhere, maybe even in the world but certainly in the nation. So if you choose a particular location like North Carolina, then that communicates to other people some special value, some special amenity that that state, in this case North Carolina, brings.

“So it’s a signal. It’s a positive signal, and it may attract other businesses. The other reason I think that people are especially interested in headquarters is that they tend to cluster. That is, if you get one or a couple of headquarters located in your area, you may very well get others. And headquarters — if you look nationwide — have been on the move.

“They used to be concentrated in a few cities — Chicago, New York, Los Angeles, Dallas — but they have been moving. And actually, North Carolina has gained in headquarters locations over the last decade.  So this is a very interesting aspect of economic development, one that I think we’ll be hearing more about in the future.”