A Strategic Analysis On Regional Headquarters Gathering In China

Recently with the speeding up of globalization and the enhancement of opening up, more and more regional headquarters (RHQs) of multinational corporations have been located in China. We can see many RHQs gathered together in several international cities in China today. We call such new phenomenon "headquarters economy".As we know, the concept of "headquarters economy" comes from the traditional theory of FDI and regional economics. But it has not developed to a popular theory that may have less meaning in practice since the phenomenon just occurred lately. On the base of the previous study, the paper tries to discover some laws of developing RHQs in China and hope to bring some enlightenment to other smaller cities.The paper begins with multinational corporations, analyzes the internal causes of the geographical aggregation by cost-benefit analysis and game theory model. On the view of multinational corporations the author explains how cities attract RHQs to estimate the cost of cities. Furthermore, the author discusses the RHQs effects and criteria by a case study to measure the benefits that cities can get from RHQs. Finally, the paper puts forward to a reference route of RHQs economy by answering two questions:how cities attract RHQs and how much benefit RHQs take back.