Political resources, business model and headquarters location of private enterprises

This paper aims to focus on how political resources and their correlation with business models affected the headquarters location decision making of successful private enterprises established in small cities.

The paper constructed a research model which included political resources and a business model as contributing factors; selected eight companies as the research object; and used cross‐case study method to explore the function of political resources and a business model to the headquarters location decision of private enterprises.

The special political environment during China's economic transformation created substantially different political resources between different regions and governments at different levels, which forced private enterprises to relocate their headquarters in order to chase political resources conveniently. The relevance of a business model and political resources determined the significantly different ways that private enterprises obtained political resources: enterprises which were highly dependent on local political resources found it difficult to make a decision regarding corporate headquarters relocation; those enterprises with a high political resources optimization capability would be driven by the pursuit of political resources to make their headquarters relocation decision; those enterprises with an inconspicuous connection between political resources and a business model would rather be “hermits” in a metropolis and relocate their headquarters.

This paper's research results would be conducive to further study of private enterprises' headquarters location decision making during China's economic transformation.

The paper indicates the importance of political resources and the relevance of corporate business models to the headquarters location decision of private enterprises; the paper further makes clear the status of political resources as an important factor in location theory.