Firm-Specific Attributes and MNE Location Choices: Financial and Professional Service FDI To New York And London

L. Nachum and C. Wymbs

Working Papers from Centre for Business Research, University of Cambridge

Abstract: In this paper, we sought to extend the theory of the location determinants of MNEs by challenging one of the fundamental assumptions underlying it, namely that location advantages are absolutes whose values are identical for different MNEs. We explicitly acknowledge the relative value of location advantages for individual MNEs and search for the firm-specific attributes affecting this variation. The empirical testing is based on an analysis of 673 financial and professional service MNEs that entered New York and London business clusters via M&As during the last two decades. The findings confirm that the value of particular location advantages varies for MNEs with different attributes, and that it is the interaction between location and firm-specific attributes, rather than each of these independently, that affects location choices. Firms' previous experience in a country, the geographic scope of their acquisition activity, and their size were found to be particularly influential attributes. Classification-JEL: F23, L10, L80, R30

Keywords: Foreign Acquisitions; Location Advantages; Clusters; Global Cities; Financial and professional service industries (search for similar items in EconPapers)
Date: 2002-03
New Economics Papers: this item is included in nep-ifn and nep-lab
Note: PRO-1
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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