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

Iulia Siedschlag (), Donal Smith, Camelia Romocea Turcu and Xiaoheng Zhang
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Xiaoheng Zhang: ESRI

No WP306, Papers from Economic and Social Research Institute (ESRI)

Abstract: 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.

Date: 2009-07
New Economics Papers: this item is included in nep-cse, nep-eec, nep-ino, nep-sbm and nep-ure
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Citations: View citations in EconPapers (2)

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Working Paper: What Determines the Attractiveness of the European Union to the Location R&D Multinational Firms? (2009)
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