The Spatial Organization of Multinational Firms
AbstractUsing six years of firm-level data covering 224 regions of the enlarged European Union, we evaluate the importance to a firm of locating its activities (production, headquarters, R&D, logistics and sales) close together. We find that, after controlling for regional characteristics, being closely located to a previous investment positively affects firm location choice. However, the impact of distance is dependent on the type of investment (production or service). While within-firm co-location is important for both service and production activities, only production plants are likely to be located close to prior production investments. In this latter case, national borders have a surprisingly positive effect, increasing the probability of choosing a nearby location, but on the other side of the border.
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Bibliographic InfoPaper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp1029.
Date of creation: Dec 2010
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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP
Functional fragmentation; vertical linkages; location choice;
Other versions of this item:
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
- R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-06-11 (All new papers)
- NEP-COM-2011-06-11 (Industrial Competition)
- NEP-CSE-2011-06-11 (Economics of Strategic Management)
- NEP-GEO-2011-06-11 (Economic Geography)
- NEP-INT-2011-06-11 (International Trade)
- NEP-URE-2011-06-11 (Urban & Real Estate Economics)
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