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Functional fragmentation and the location of multinational firms in the enlarged Europe

Listed author(s):
  • Fabrice Defever

    ()

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Despite the recent advances in the theory of location, the analysis of the role of services surrounding production activity has been largely neglected. This paper analyzes the co-location of a multinational firm's value chain in the enlarged European Union. Depending on its particular characteristics, each function (or activity) would favor different country characteristics. Opposing this dispersion force, vertical linkages between stages can encourage firms to co-locate different activities in the same country. We use recently collected individual firm data on almost 11 000 location choices for a 5 years period and 23 countries. We analyze the determinants of location choice for each activity, including sectoral and functional agglomeration variables. We also illuminate the co-location of functions at the firm level, specifically that of R&D and production.

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File URL: https://halshs.archives-ouvertes.fr/halshs-00118808/document
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Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00118808.

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Date of creation: Jun 2006
Publication status: Published in Cahiers de la Maison des Sciences Economiques 2006.52 - ISSN 1624-0340. 2006
Handle: RePEc:hal:cesptp:halshs-00118808
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00118808
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