IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

What Determines the Attractiveness of EU Regions to the Location of Multinational Firms in the ICT Sector?

  • Siedschlag, Iulia

    (ESRI)

  • Zhang, Xiaoheng

    (ESRI)

  • Smith, Donal

    (ESRI)

We examine the attractiveness of European Union regions for location of multinationals in the Information and Communication Technologies (ICT) sector. Using data on 8,543 foreign subsidiaries established in 229 regions of the European Union over the period 1998-2008 we find that on average, the location probability increases with regional demand, agglomeration economies, technological development, flexibility of labour markets, and information technology infrastructure. The determinants of the location choice of ICT multinationals are different for regions in Western Europe and Central and Eastern Europe. While in Western Europe, regions with higher GDP per capita are preferred for both ICT multinationals in manufacturing and service sectors, in Central and Eastern Europe, regions with lower GDP per capita attract the bulk of ICT multinationals in the service sector. Unemployment rates appear negatively correlated with the probability of location in the whole European Union and Western Europe, while they increase attractiveness for regions in Central and Eastern Europe. Some determinants are also found to have heterogeneous effects on multinationals from different countries. In particular, US multinationals are not sensitive to labour costs while EU multinationals respond to this factor negatively.

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Paper provided by Economic and Social Research Institute (ESRI) in its series Papers with number DYNREG45.

as
in new window

Length: 44 pages
Date of creation: 2009
Date of revision:
Handle: RePEc:esr:wpaper:dynreg45
Contact details of provider: Postal:
Whitaker Square, Sir John Rogerson's Quay, Dublin 2

Phone: (353-1) 863 2000
Fax: (353-1) 863 2100
Web page: http://www.esri.ie
Email:


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. Mayer, T. & Mejean, I. & Nefussi, B., 2010. "The location of domestic and foreign production affiliates by French multinational firms," Journal of Urban Economics, Elsevier, vol. 68(2), pages 115-128, September.
  2. Crozet, Matthieu & Mayer, Thierry & Mucchielli, Jean-Louis, 2003. "How do Firms Agglomerate? A Study of FDI in France," CEPR Discussion Papers 3873, C.E.P.R. Discussion Papers.
  3. Guimaraes, Paulo & Figueiredo, Octávio & Woodward, Douglas, 2002. "Modeling industrial location decisions in U.S. counties," ERSA conference papers ersa02p060, European Regional Science Association.
  4. Hogenbirk Annelies & Narula Rajneesh, 2004. "Location and agglomeration of FDI in The Netherlands: implications for policy," Research Memorandum 006, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  5. Caves, Richard E, 1971. "International Corporations: The Industrial Economics of Foreign Investment," Economica, London School of Economics and Political Science, vol. 38(149), pages 1-27, February.
  6. Heinz Hollenstein, 2002. "Determinants of the Adoption of Information and Communication Technologies (ICT)," WIFO Working Papers 183, WIFO.
  7. Barrios, Salvador & Navajas Cawood, Elena, 2008. "The Location of ICT activities in EU regions. Implications for regional policies," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 13, pages 179-210.
  8. Keith Head & John Ries & Deborah Swenson, 1994. "Agglomeration Benefits and Location Choice: Evidence from Japanese Manufacturing Investment in the United States," NBER Working Papers 4767, National Bureau of Economic Research, Inc.
  9. Ekholm, Karolina & Forslid, Rikard & Markusen, James R., 2003. "Export-Platform Foreign Direct Investment," CEPR Discussion Papers 3823, C.E.P.R. Discussion Papers.
  10. 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).
  11. Puga, Diego, 1999. "The rise and fall of regional inequalities," European Economic Review, Elsevier, vol. 43(2), pages 303-334, February.
  12. Leonardo Becchetti & Luigi Paganetto & David Andres Londono Bedoya, 2003. "ICT Investment, Productivity and Efficiency: Evidence at Firm Level Using a Stochastic Frontier Approach," CEIS Research Paper 29, Tor Vergata University, CEIS.
  13. James R. Markusen & Anthony J. Venables, 1995. "Multinational Firms and The New Trade Theory," NBER Working Papers 5036, National Bureau of Economic Research, Inc.
  14. Markusen, James R. & Venables, Anthony J., 2000. "The theory of endowment, intra-industry and multi-national trade," Journal of International Economics, Elsevier, vol. 52(2), pages 209-234, December.
  15. Richard E. Baldwin & Paul Krugman, 2002. "Agglomeration, Integration and Tax Harmonization," NBER Working Papers 9290, National Bureau of Economic Research, Inc.
  16. Clausing, Kimberly A., 2003. "Tax-motivated transfer pricing and US intrafirm trade prices," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 2207-2223, September.
  17. Florian Heiss, 2002. "Structural choice analysis with nested logit models," Stata Journal, StataCorp LP, vol. 2(3), pages 227-252, August.
  18. Anne-Celia Disdier & Thierry Mayer, 2003. "How Different is Eastern Europe? Structure and Determinants of Location Choices by French Firms in Eastern and Western Europe," Working Papers 2003-13, CEPII research center.
  19. Helpman, Elhanan, 1984. "A Simple Theory of International Trade with Multinational Corporations," Journal of Political Economy, University of Chicago Press, vol. 92(3), pages 451-71, June.
  20. Venables, Anthony J, 1996. "Equilibrium Locations of Vertically Linked Industries," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(2), pages 341-59, May.
  21. Baldwin, Richard E., 1999. "Agglomeration and endogenous capital," European Economic Review, Elsevier, vol. 43(2), pages 253-280, February.
  22. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
  23. Roberto Basile & Davide Castellani & Antonello Zanfei, 2003. "Location choices of multinational firms in Europe: the role of national boundaries and EU policy," International Trade 0310001, EconWPA.
  24. Huizinga, Harry & Laeven, Luc, 2007. "International Profit Shifting within European Multinationals," CEPR Discussion Papers 6048, C.E.P.R. Discussion Papers.
  25. 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.
  26. Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, Oxford University Press, vol. 107(3), pages 797-817.
  27. Swenson, Deborah L., 2001. "Tax Reforms and Evidence of Transfer Pricing," National Tax Journal, National Tax Association, vol. 54(n. 1), pages 7-26, March.
  28. S. Lael Brainard, 1993. "A Simple Theory of Multinational Corporations and Trade with a Trade-Off Between Proximity and Concentration," NBER Working Papers 4269, National Bureau of Economic Research, Inc.
  29. Fazia Pusterla & Laura Resmini, 2005. "Where do foreign firms locate in transition Countries? An empirical investigation," ISLA Working Papers 20, ISLA, Centre for research on Latin American Studies and Transition Economies, Universita' Bocconi, Milano, Italy, revised Sep 2005.
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:esr:wpaper:dynreg45. 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: (Sarah Burns)

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.