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How Different is Eastern Europe? Structure and determinants of location choices by French firms in Eastern and Western Europe

Author

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  • Anne-Célia Disdier

    (TEAM - Théories et Applications en Microéconomie et Macroéconomie - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, ECO-PUB - Economie Publique - INRA - Institut National de la Recherche Agronomique - INA P-G - Institut National Agronomique Paris-Grignon)

  • Thierry Mayer

    (TEAM - Théories et Applications en Microéconomie et Macroéconomie - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

n this paper, we investigate the determinants of location choices of French multinational firms in Eastern and Western Europe. Our sample includes 1843 location choices in 19 countries from 1980 to 1999. We find important differences between the two regions of Europe regarding these determinants. Agglomeration effects are less strong in Central and Eastern European countries (CEECs) than in European Union (EU) countries. Location decisions are influenced significantly and positively by the institutional quality of the host country. We also investigate whether investors consider Western Europe and Eastern Europe as two distinct groups of potential host countries. We confirm the relevance of an East-West structure in the country location decision and show that this relevance decreases as the transition process advances, in CEE countries. Journal of Comparative Economics 32 (2) (2004) 280-296.

Suggested Citation

  • Anne-Célia Disdier & Thierry Mayer, 2004. "How Different is Eastern Europe? Structure and determinants of location choices by French firms in Eastern and Western Europe," Post-Print hal-00268769, HAL.
  • Handle: RePEc:hal:journl:hal-00268769
    DOI: 10.1016/j.jce.2004.02.004
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00268769
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    More about this item

    Keywords

    Foreign direct investment; Eastern Europe; European Union; Nested logit; Conditional logit; Location choice;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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