Family First: CEOs' Private Incentives in Corporate Relocations

Using novel data on executives’ families, we identify CEOs’ private motives in moving corporate headquarters (HQ). We find that HQ relocations spike after the arrival of a new CEO and peak during their second year on the job. CEOs systematically relocate HQs closer to their families over plausible location alternatives. Over 35% of relocations place the new HQ within 50 miles of the CEO’s children and away from production sites and industry clusters. Such relocations entail negative announcement returns, higher employee turnover, and weaker insider reviews. Using an out-of-state marriage of a CEO’s child as an instrument for the CEO’s location preferences, we show that executives’ private incentives affect corporate migration.