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Location choices of multinational firms in Europe: the role of national boundaries and EU policy Author info | Abstract | Publisher info | Download info | Related research | Statistics Roberto Basile (ISAE, Rome)
Davide Castellani (ISE-Università di Urbino)
Antonello Zanfei (ISE-Università di Urbino)
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registered author(s):
What determines multinational firms’ location choices in Europe? Do national boundaries matter in location decisions? To what extent are European regional policies (Structural and Cohesion Funds) able to mitigate the agglomeration forces at work? Do location determinants differ for EU and US MNEs? In this paper, we address these questions using data from 5,761 foreign subsidiaries established in 55 regions in 8 EU countries over the period 1991-1999 and estimating a nested logit model of location choices. Controlling for regional market size and potential, agglomeration economies and labor markets conditions, we find that EU policy, proxied by Cohesion Fund and Objective 1 eligibility, played a significant role in attracting multinationals. Differences emerge in determinants of EU and US multinationals location choices, with special reference to the role of labor markets. National boundaries do not seem to affect location decisions, with the relevant exception of Italy. Results suggest that multinational firms’ perceive European regions as geo-economic aggregates different from the actual political boundaries of countries.
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Paper provided by EconWPA in its series International Trade with number
0310001.
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Date of creation: 06 Oct 2003Date of revision:
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Find related papers by JEL classification: F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business O52 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Europe R30 - Urban, Rural, and Regional Economics - - Production Analysis and Firm Location - - - General
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references Cited by : (explanations , 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.)
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