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Firm-Specific Attributes and MNE Location Choices: Financial and Professional Service FDI To New York And London

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  • L. Nachum
  • C. Wymbs

Abstract

In this paper, we sought to extend the theory of the location determinants of MNEs by challenging one of the fundamental assumptions underlying it, namely that location advantages are absolutes whose values are identical for different MNEs. We explicitly acknowledge the relative value of location advantages for individual MNEs and search for the firm-specific attributes affecting this variation. The empirical testing is based on an analysis of 673 financial and professional service MNEs that entered New York and London business clusters via M&As during the last two decades. The findings confirm that the value of particular location advantages varies for MNEs with different attributes, and that it is the interaction between location and firm-specific attributes, rather than each of these independently, that affects location choices. Firms' previous experience in a country, the geographic scope of their acquisition activity, and their size were found to be particularly influential attributes. Classification-JEL: F23, L10, L80, R30

Suggested Citation

  • L. Nachum & C. Wymbs, 2002. "Firm-Specific Attributes and MNE Location Choices: Financial and Professional Service FDI To New York And London," Working Papers wp223, Centre for Business Research, University of Cambridge.
    • Handle: RePEc:cbr:cbrwps:wp223
    Note: PRO-1
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    File URL: https://www.jbs.cam.ac.uk/cbrwp223/
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    References listed on IDEAS

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    1. Dupuy, Claude & Gilly, Jean-Pierre, 1999. "Industrial Groups and Territories: The Case of Matra-Marconi-Space in Toulouse," Cambridge Journal of Economics, Oxford University Press, vol. 23(2), pages 207-223, March.
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    Cited by:

    1. Edler, Jakob & Georghiou, Luke, 2007. "Public procurement and innovation--Resurrecting the demand side," Research Policy, Elsevier, vol. 36(7), pages 949-963, September.
    2. Görg, Holger & Lauber, Verena & Meyer, Birgit & Nunnenkamp, Peter, 2008. "Firm heterogeneity and choice of ownership structure: an empirical analysis of German FDI in India," Kiel Working Papers 1462, Kiel Institute for the World Economy (IfW Kiel).
    3. Paul Kalfadellis, 2015. "Location Advantages and Repeat Investment in Australia: A Two-State Comparison," Regional Studies, Taylor & Francis Journals, vol. 49(7), pages 1140-1159, July.
    4. Adelheid Holl & Rafael Pardo & Ruth Rama, 2010. "Just-in-Time Manufacturing Systems, Subcontracting and Geographic Proximity," Regional Studies, Taylor & Francis Journals, vol. 44(5), pages 519-533.
    5. Trofimenko, Natalia, 2010. "Factors affecting location decisions of the economic headliners - exporters and foreign-owned firms - in China," Kiel Working Papers 1645, Kiel Institute for the World Economy (IfW Kiel).
    6. Amnon Frenkel, 2012. "Intra-metropolitan Competition for Attracting High-technology Firms," Regional Studies, Taylor & Francis Journals, vol. 46(6), pages 723-740, September.
    7. Junjie Hong, 2007. "Firm-specific Effects on Location Decisions of Foreign Direct Investment in China's Logistics Industry," Regional Studies, Taylor & Francis Journals, vol. 41(5), pages 673-683.

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    More about this item

    Keywords

    Foreign Acquisitions; Location Advantages; Clusters; Global Cities; Financial and professional service industries;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L80 - Industrial Organization - - Industry Studies: Services - - - General
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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