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

Fabrice Defever

Cahiers de la Maison des Sciences Economiques from Université Panthéon-Sorbonne (Paris 1)

Abstract: 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 characteristic. 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

Keywords: Functional fragmentation; vertical linkages; location choice (search for similar items in EconPapers)
JEL-codes: F23 L22 R3 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2006-06
New Economics Papers: this item is included in nep-geo
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (87)

Published in Regional Science and Urban Economics, Elsevier, 2006, 36 (5), pp.658-677

Downloads: (external link)
https://halshs.archives-ouvertes.fr/halshs-00118808 (application/pdf)
https://doi.org/10.1016/j.regsciurbeco.2006.06.007

Related works:
Journal Article: Functional fragmentation and the location of multinational firms in the enlarged Europe (2006)
Working Paper: Functional fragmentation and the location of multinational firms in the enlarged Europe (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:mse:wpsorb:bla06052

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