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Where do MNEs Expand Production: Location Choices of the Pharmaceutical Industry in Europe after 1992

Author

Listed:
  • Frances Ruane

    (Economic and Social Research Institute (ESRI))

  • Xiaoheng Zhang

    (The Institute for International Integration Studies, Trinity College Dublin)

Abstract

Differences in regulations, technical standards and national medical cultures across EU member states created a highly segmented pharmaceutical market in Europe prior to the implementation of the Single Market Programme. The subsequent reduction in non-tariff barriers to trade would be expected to have an impact on where pharmaceutical multinationals locate production within the EU. Using discrete-choice models, we study the determinants of multinationals? location choices in terms of expanded production at existing facilities. Our results support the findings of New Economic Geography models that predict reduced rather than increased agglomeration in the face of trade-cost reductions.

Suggested Citation

  • Frances Ruane & Xiaoheng Zhang, 2007. "Where do MNEs Expand Production: Location Choices of the Pharmaceutical Industry in Europe after 1992," Papers WP211, Economic and Social Research Institute (ESRI).
    • Handle: RePEc:esr:wpaper:wp211
    as

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    File URL: https://www.esri.ie/pubs/WP211.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Economic geographic; location choice; discrete choice models; European integration; FDI;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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