Corporate Relocation and Housing Market Spillovers

Abstract

Using a comprehensive database of corporate relocation events in the United States from 1994 to 2017, we investigate the impact of headquarters relocation on the local economy by examining its spillover effects on the housing market. We find that headquarters relocation into a district at zip code level leads to 10% higher housing price growth. We also document a temporal spillover effect whereby housing prices increase one year before the relocation and rise further until two years afterward and a significant spatial spillover effect of corporate relocation on nearby zip codes’ housing markets up to 15 miles. We show the positive spillover effect on housing price growth is more pronounced for relocating firms with larger employee sizes and economic bases. We further find local economic spillover and agglomeration economies associated with corporate relocation. Overall, our study indicates that corporate relocation exhibits a significant impact on the local housing market. This paper was accepted by Agostino Capponi, finance. Funding: The project received research grant from the Alrov Institute for Real Estate Research. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2021.01819 .