Does FDI in Manufacturing Cause FDI in Business Services? Evidence from French Firm-Level Data
AbstractThis paper uses a large French firm-level data set to evaluate the determinants of location choices in services. In a first step, estimates for four broad services sectors are compared with the estimates for the manufacturing sector. Using a discrete choice model, we find that this framework does fairly well in explaining location choices in services and that the parameter estimates for services are close to the ones for manufacturing. We then investigate whether the similarity in estimated parameters is due to a complementarity between location choices in manufacturing and in services, in the sense that manufacturing location choices may cause the location of services. A particularly appropriate services sector, for this purpose is the business services sector, for which input-output linkages with the manufacturing sector are particularly strong. It is found that the downstream demand of French manufacturing firms has a positive effect on the location choice probabilities of French business services firms. This effect is robust.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by CEPII research center in its series Working Papers with number 2007-21.
Date of creation: Dec 2007
Date of revision:
International firms; International trade models and databases; FDI; Gravity model; services;
Other versions of this item:
- Benjamin Nefussi & Cyrille Schwellnus, 2010. "Does FDI in manufacturing cause FDI in business services? Evidence from French firm-level data," Canadian Journal of Economics, Canadian Economics Association, vol. 43(1), pages 180-203, February.
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F15 - International Economics - - Trade - - - Economic Integration
- L80 - Industrial Organization - - Industry Studies: Services - - - General
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Arnold, Jens & Mattoo, Aaditya & Smarzynska Javorcik, Beata, 2006. "Does Services Liberalization Benefit Manufacturing Firms?," CEPR Discussion Papers 5902, C.E.P.R. Discussion Papers.
- Davide CASTELLANI & Valentina MELICIANI & Loredana Mirra, 2012.
"The determinants of inward foreign direct investment in business services across european regions,"
Quaderni del Dipartimento di Economia, Finanza e Statistica
104/2012, Università di Perugia, Dipartimento Economia, Finanza e Statistica.
- Valentina Meliciani & davide castellani & loredana mirra, 2013. "The Determinants Of Inward Foreign Direct Investment In Business Services Across European Regions," ERSA conference papers ersa13p861, European Regional Science Association.
- Nuno Crespo & Maria Paula Fontoura, 2009.
"Does the location of manufacturing determine service sectors’ location choices? Evidence from Portugal,"
0018, Gabinete de Estratégia e Estudos, Ministério da Economia e da Inovação, revised Sep 2009.
- Nuno CRESPO & Maria Paula FONTOURA, 2010. "Does the location of manufacturing determine service sectors’ location choices? Evidence from Portugal," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 10(1).
- Nuno Crespo & Maria Paula Fontoura, 2009. "Does the location of manufacturing determine service sectors’ location choices? Evidence from Portugal," Working Papers Department of Economics 2009/33, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
- Resmini, Laura & Siedschlag, Iulia, 2013. "Is foreign direct investment to China crowding out the foreign direct investment to other countries?," China Economic Review, Elsevier, vol. 25(C), pages 1-16.
- Fernandes, Ana M. & Paunov, Caroline, 2012. "Foreign direct investment in services and manufacturing productivity: Evidence for Chile," Journal of Development Economics, Elsevier, vol. 97(2), pages 305-321.
- Spyros Arvanitis & Tobias Stucki & Heinz Hollenstein, 2013. "Determinants of Internationalisation – Do they Differ among Sectors and Business Functions? Evidence from Firm-level Data," KOF Working papers 13-348, KOF Swiss Economic Institute, ETH Zurich.
- Broussolle Damien, 2012.
"A Note on the Links Between Manufacturing, Goods and Services Exports,"
The AMFITEATRU ECONOMIC journal,
Academy of Economic Studies - Bucharest, Romania, vol. 14(Special N), pages 600-620, November.
- Damien Broussolle, 2012. "A note on the links between manufacturing, goods and services exports," Working Papers of LaRGE Research Center 2012-09, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg (France).
- Giuseppe Tattara, 2008. "The Internationalisation of Production Activities of Italian Industrial Districts," Working Papers 2008_13, Department of Economics, University of Venice "Ca' Foscari".
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.