By Dhriti Sonthalia
In the dynamic world of corporate leadership today, the ascent of women to chief executive officer (CEO) positions has sparked a crucial debate: Are female CEOs as profit-minded as their male counterparts? A crucial test of this question lies in corporate relocations—one of the most consequential decisions a leader can make. Moving a company’s headquarters can signal a sharp focus on cost-cutting, regulatory advantages, or access to top talent, all in pursuit of maximizing shareholder value. Yet, popular psychology often portrays female leaders as more risk-averse, community-oriented, and inclined toward long-term stability over immediate financial gains. If these traits extend to corporate strategy, we might expect women-led firms to relocate less frequently or weigh different factors when they do.
Combining the National Establishment Time Series (NETS) Database and data on state corporate tax rates and costs of living, I analyzed corporate relocations, focusing on whether CEOs of different genders respond differently to corporate tax rates and costs of living in both origin and destination states. While I find only modest differences in overall movement rates, male and female CEOs seem to respond differently to tax rates and cost of living.
Figure 1: Move Outcomes based on Gender of CEO over 1990-2004
Over the span of 14 years, data shows that while male CEOs have exhibited somewhat higher overall willingness to relocate, among those who do move, female CEOs are slightly more likely to cross state lines. Figure 1 represents results that 11% of total male CEO-run companies have moved their business location; only about 11% of those establishments have moved to another state. I also found that a share of 12% of female-run companies that have already moved make the decision to move out of state. Given the large sample size, both of these gender differences are statistically significant. I next explore the factors driving these relocation decisions, which could range from political, economical, or even the environmental climate of the origin or destination state.
Figure 2 shows characteristics that drive movement decisions as shown in the left panel of Figure 1. It consists of the marginal effects of a rise in taxes or costs on the likelihood that a CEO of a specific gender relocates their company out of state. I find that both male and female CEOs do respond systematically to higher taxes and higher costs by relocating. I find that women respond more strongly to taxes, while men respond more strongly to the cost of living.
Interestingly, the results also reveal that out-of-state moves are associated with higher cost-of-living indices in the destination state. This suggests that while tax incentives play a crucial role in motivating corporate relocations across state borders, CEOs may also be willing to accept a higher cost of living in exchange for access to talent pools and business opportunities that support long-term growth. In contrast, firms that relocate within the same state appear to prioritize cost-of-living reductions, potentially seeking more affordable operational environments while maintaining proximity to their existing networks. These findings clarify the trade-offs that executives weigh when making relocation decisions and highlight the distinct strategic considerations driving in-state versus out-of-state moves.
In conclusion, this study emphasizes the importance of an objective approach in social science research, particularly in understanding gender dynamics in corporate leadership. My analysis reveals that both male and female CEOs strategically respond to economic incentives, albeit differently: females are more sensitive to tax rates, while males are more influenced by cost-of-living changes. These findings underscore the complexity of gender roles in decision-making processes and highlight the need to allow data to drive conclusions, fostering a deeper understanding of the strategic considerations that influence corporate relocations.
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Article by Dhriti Sonthalia ’27 Data Journalist |
 
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