Scope, scale, and locational preferences: an analysis of emerging multinationals

José C. Fariñas (), Ana Martín-Marcos () and Lourdes Moreno ()
Additional contact information
José C. Fariñas: Universidad Complutense de Madrid
Ana Martín-Marcos: UNED
Lourdes Moreno: Universidad Complutense de Madrid

Empirica, 2025, vol. 52, issue 3, No 6, 559-589

Abstract: Abstract This paper aims to examine the case of emerging multinationals, using a large sample of Spanish parent-subsidiary links obtained from ORBIS Bureau van Dijk. Three characteristics of multinational firms are specifically considered: their scope, scale, and location decisions. Our results confirm that more productive firms engage in greater multinational activity in terms of their scope (the number of foreign markets in which they invest) and scale (the volume of local sales by subsidiaries in foreign markets). The structure of multinational firms’ activity is also analyzed from the perspective of host country characteristics. Distance and the relative labor costs of the host country are negatively related to the scope of foreign direct investment decisions, whereas the presence of a common language, host country size, and institutional quality positively influence decisions to invest abroad. In the manufacturing sector, host country tariffs positively correlate with the scope of multinational firms' operations, whereas regulatory trade barriers in host countries negatively influence investment decisions in the services sector. These results are robust to the control of endogeneity between parent firms’ productivity and both the scope and scale of subsidiaries abroad. Graphical abstract

Keywords: Multinational firms; Firm heterogeneity; Productivity; Location decision (search for similar items in EconPapers)
JEL-codes: F10 F23 L25 R30 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10663-025-09643-5 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:empiri:v:52:y:2025:i:3:d:10.1007_s10663-025-09643-5

Ordering information: This journal article can be ordered from
http://www.springer. ... ration/journal/10663

DOI: 10.1007/s10663-025-09643-5

Access Statistics for this article

Empirica is currently edited by Fritz Breuss and Fritz Breuss

More articles in Empirica from Springer, Austrian Institute for Economic Research, Austrian Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().