IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

The location choices of multinational firms : the role of internationalization experience and group affiliation

  • Gazaniol, Alexandre
Registered author(s):

    This paper investigates whether location choices of multinational firms depend on past export, import or FDI experience on foreign markets, and the experience of other affiliated firms. Using French data, we observe that 95% of new FDIs are preceded by exports in the same country, whereas 73% are preceded by imports. Regardless of locations’ observable and unobservable characteristics, we find that exporting in a given country, and to a smaller extent importing from it, significantly phase is more systematic for investing in distant countries and for first-time investors, whereas import experience is significantly correlated with FDI in low-income countries. Location choices not only depend on the investor’s own international experience, but also on the international experience of other affiliated firms: firms tend to invest in countries where the group already owns a local affiliate, and are more likely to invest in a distant country if other affiliated firms are already exporting there. These findings suggest the existence of coordinated strategies and/or information sharing between affiliated firms.

    If 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.

    File URL: http://basepub.dauphine.fr/xmlui/bitstream/123456789/9018/1/2012-02.pdf
    Download Restriction: no

    Paper provided by Paris Dauphine University in its series Economics Papers from University Paris Dauphine with number 123456789/9018.

    as
    in new window

    Length:
    Date of creation: 2012
    Date of revision:
    Publication status: Published in DIAL Document de travail, 2012
    Handle: RePEc:dau:papers:123456789/9018
    Contact details of provider: Web page: http://www.dauphine.fr/en/welcome.html
    More information through EDIRC

    References listed on IDEAS
    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.:

    as in new window
    1. Stephen Redding & Anthony J. Venables, 2001. "Economic Geography and International Inequality," CEP Discussion Papers dp0495, Centre for Economic Performance, LSE.
    2. James E. Rauch & Joel Watson, 1999. "Starting Small in an Unfamiliar Environment," NBER Working Papers 7053, National Bureau of Economic Research, Inc.
    3. Facundo Albornoz & Héctor Calvo-Pardo & Gregory Corcos & Emanuel Ornelas, 2010. "Sequential exporting," LSE Research Online Documents on Economics 28724, London School of Economics and Political Science, LSE Library.
    4. Fabrice Defever, 2006. "Functional fragmentation and the location of multinational firms in the enlarged Europe," Cahiers de la Maison des Sciences Economiques bla06052, Université Panthéon-Sorbonne (Paris 1).
    5. Jan Johanson & Jan-Erik Vahlne, 1977. "The Internationalization Process of the Firm—A Model of Knowledge Development and Increasing Foreign Market Commitments," Journal of International Business Studies, Palgrave Macmillan, vol. 8(1), pages 23-32, March.
    6. Matthieu Crozet & Thierry Mayer & Jean-Louis Mucchielli, 2004. "How do firms agglomerate? A study of FDI in france," Sciences Po publications info:hdl:2441/c8dmi8nm4pd, Sciences Po.
    7. Thierry Mayer & Isabelle Méjean & Benjamin Nefussi, 2007. "The Location of Domestic and Foreign Production Affiliates by French Multinational Firms," Sciences Po publications 2007-07, Sciences Po.
    8. Head, C. Keith & Ries, John C. & Swenson, Deborah L., 1999. "Attracting foreign manufacturing: Investment promotion and agglomeration," Regional Science and Urban Economics, Elsevier, vol. 29(2), pages 197-218, March.
    9. Head, Keith & Mayer, Thierry, 2002. "Market Potential and the Location of Japanese Investment in the European Union," CEPR Discussion Papers 3455, C.E.P.R. Discussion Papers.
    10. Kenneth Train, 2003. "Discrete Choice Methods with Simulation," Online economics textbooks, SUNY-Oswego, Department of Economics, number emetr2, September.
    11. Roberto Basile & Davide Castellani & Antonello Zanfei, 2007. "Location choices of multinational firms in Europe: the role of EU cohesion policy," Quaderni del Dipartimento di Economia, Finanza e Statistica 32/2007, Università di Perugia, Dipartimento Economia.
    12. Benjamin Nefussi & Cyrille Schwellnus, 2007. "Does FDI in Manufacturing Cause FDI in Business Services? Evidence from French Firm-Level Data," Working Papers 2007-21, CEPII research center.
    13. Buettner, Thiess & Ruf, Martin, 2005. "Tax incentives and the location of FDI: evidence from a panel of German multinationals," Discussion Paper Series 1: Economic Studies 2005,17, Deutsche Bundesbank, Research Centre.
    14. Egger, Peter & Fahn, Matthias & Merlo, Valeria & Wamser, Georg, 2014. "On the genesis of multinational foreign affiliate networks," European Economic Review, Elsevier, vol. 65(C), pages 136-163.
    15. Fabrice Defever & Jean-Louis Mucchielli, 2005. "Décomposition internationale de la chaîne de valeur. Une étude de la localisation des firmes multinationales dans l'Union européenne élargie," Revue économique, Presses de Sciences-Po, vol. 56(6), pages 1185-1205.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:dau:papers:123456789/9018. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alexandre Faure)

    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.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.