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What Determines the Attractiveness of the European Union to the Location of R&D Multinational Firms?

  • Siedschlag, Iulia


  • Smith, Donal


  • Turcu, Camelia

    (CRIEF, University of Poitiers)

  • Zhang, Xiaoheng


We analyse 446 location decisions of foreign affiliates in the R&D sector incorporated in the European Union over 1999-2006. Our results suggest that on average, the location probability increases with the size of demand, agglomeration economies, low production cost, R&D intensity, flexibility of labour markets, access to skilled labour and information technology infrastructure. Our evidence suggests that after controlling for the R&D intensity of regions, European Union's regional policy and country level tax differences have had no significant effects in fostering the attractiveness of regions to R&D foreign investment. We find evidence of geographical structures relevant for the location choice of R&D multinational firms across the European Union. Further, we find that European investors have responded differently to location characteristics in comparison to North American investors.

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Paper provided by Economic and Social Research Institute (ESRI) in its series Papers with number WP306.

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Date of creation: Jul 2009
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Handle: RePEc:esr:wpaper:wp306
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