The Global Agglomeration of Multinational Firms
AbstractThe explosion of multinational activities in recent decades is rapidly transforming the global landscape of industrial production. But are the emerging clusters of multinational production the rule or the exception? What drives the offshore agglomeration of multinational firms in comparison to the agglomeration of domestic firms? Using a unique worldwide plant-level dataset that reports detailed location, ownership, and operation information for plants in over 100 countries, we construct a spatially continuous index of pairwise-industry agglomeration and investigate the patterns and determinants underlying the global economic geography of multinational firms. Our analysis presents new stylized facts that suggest the emerging offshore clusters of multinationals are not a simple reflection of domestic industrial clusters. Agglomeration economies including capital-good market externality and technology diffusion play a more important role in the offshore agglomeration of multinationals than the agglomeration of domestic firms. These findings remain robust when we address potential reverse causality by exploring the regional pattern and process of agglomeration.
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 Harvard Business School in its series Harvard Business School Working Papers with number 10-043.
Length: 59 pages
Date of creation: Dec 2009
Date of revision: Apr 2014
multinational firm; agglomeration; location fundamentals; agglomeration economies;
Other versions of this item:
- Laura Alfaro & Maggie Chen, 2009. "The Global Agglomeration of Multinational Firms," NBER Working Papers 15576, National Bureau of Economic Research, Inc.
- Maggie Xiaoyang Chen & Laura Alfaro, 2010. "The Global Agglomeration of Multinational Firms," Working Papers 2010-16, The George Washington University, Institute for International Economic Policy.
- F2 - International Economics - - International Factor Movements and International Business
- D2 - Microeconomics - - Production and Organizations
- R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-01-10 (All new papers)
- NEP-CSE-2010-01-10 (Economics of Strategic Management)
- NEP-NET-2010-01-10 (Network Economics)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Lorenzo Burlon, 2012. "How Do Aggregate Fluctuations Depend on the Network Structure of the Economy?," Working Papers in Economics 278, Universitat de Barcelona. Espai de Recerca en Economia.
- Serafinelli, Michel, 2013.
"Good Firms, Worker Flows and Productivity,"
47508, University Library of Munich, Germany.
- Sun, Churen & Yu, Zhihao & Zhang, Tao, 2012. "Agglomeration and Trade with Heterogeneous Firms," MPRA Paper 49001, University Library of Munich, Germany, revised 17 Aug 2013.
- Carluccio, Juan & Fally, Thibault, 2013.
"Foreign entry and spillovers with technological incompatibilities in the supply chain,"
Journal of International Economics,
Elsevier, vol. 90(1), pages 123-135.
- Carluccio, Juan & Fally, Thibault, 2010. "Foreign Entry and Spillovers with Technological Incompatibilities in the Supply Chain," CEPR Discussion Papers 7866, C.E.P.R. Discussion Papers.
- William R. Kerr & Scott Duke Kominers, 2012.
"Agglomerative Forces and Cluster Shapes,"
12-09, Center for Economic Studies, U.S. Census Bureau.
- William R. Kerr & Scott Duke Kominers, 2010. "Agglomerative Forces and Cluster Shapes," Harvard Business School Working Papers 11-061, Harvard Business School, revised Nov 2012.
- William R. Kerr & Scott Duke Kominers, 2010. "Agglomerative Forces and Cluster Shapes," NBER Working Papers 16639, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Soebagio Notosoehardjo).
If references are entirely missing, you can add them using this form.