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The Single Market and the Geographical Diversification of Leading Firms in the EU


  • Stephen Pavelin

    (University of Reading)

  • Frank Barry

    (University College Dublin)


Geographical diversification describes the degree to which a firm’s operations in a particular industry are dispersed across countries. This paper presents evidence on the geographical diversification within the EU of the roughly 290 largest manufacturing firms in Europe. We explore how geographical diversification changed over the period when the Single Market came into effect, finding that it increased substantially. We also study the variation across sectors and across EU countries. Ireland – which began its rapid convergence on average EU living standards over this period – emerges as a special case and receives particular attention.

Suggested Citation

  • Stephen Pavelin & Frank Barry, 2005. "The Single Market and the Geographical Diversification of Leading Firms in the EU," The Economic and Social Review, Economic and Social Studies, vol. 36(1), pages 1-17.
  • Handle: RePEc:eso:journl:v:36:y:2005:i:1:p:1-17

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    References listed on IDEAS

    1. Barry, Frank & Bradley, John, 1997. "FDI and Trade: The Irish Host-Country Experience," Economic Journal, Royal Economic Society, vol. 107(445), pages 1798-1811, November.
    2. James R. Markusen, 2004. "Multinational Firms and the Theory of International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262633078, January.
    3. Neary, J Peter, 2002. "Foreign Direct Investment and the Single Market," Manchester School, University of Manchester, vol. 70(3), pages 291-314, June.
    4. Huizinga, Harry, 1990. "Unions, taxes and the structure of multinational enterprises," Economics Letters, Elsevier, vol. 34(1), pages 73-75, September.
    5. James R. Markusen, 1995. "The Boundaries of Multinational Enterprises and the Theory of International Trade," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 169-189, Spring.
    6. James R. Markusen, 1998. "Multinational Firms, Location and Trade," The World Economy, Wiley Blackwell, vol. 21(6), pages 733-756, August.
    7. Frank Barry & John Bradley & Aoife Hannan, 2001. "The Single Market, the Structural Funds and Ireland's Recent Economic Growth," Journal of Common Market Studies, Wiley Blackwell, vol. 39(3), pages 537-552, September.
    8. K.H. Midelfart & H.G. Overman & S.J. Redding & A.J. Venables, 2000. "The location of European industry," European Economy - Economic Papers 2008 - 2015 142, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
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    Cited by:

    1. Lawless, Martina, 2006. "Geography and Firm Exports: New Evidence on Sunk Costs," MPRA Paper 10006, University Library of Munich, Germany.
    2. repec:got:cegedp:58 is not listed on IDEAS
    3. Köller, Mareike, 2006. "Ausländische Direktinvestitionen in Irland: Eine theoriegestützte Analyse," Center for European, Governance and Economic Development Research Discussion Papers 58, University of Goettingen, Department of Economics.
    4. Neary, J. Peter, 2009. "Trade costs and foreign direct investment," International Review of Economics & Finance, Elsevier, vol. 18(2), pages 207-218, March.
    5. Frank Barry and Rosemary Healy-Rae, 2008. "FDI Implications of Recent European Court of Justice Decision on Corporation Tax Matters," The Institute for International Integration Studies Discussion Paper Series iiisdp270, IIIS.
    6. Frank Barry & Aoife Hannan, 2003. "Product characteristics and the growth of FDI," Working Papers 200308, School of Economics, University College Dublin.

    More about this item

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe


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