Location choices of multinational firms in Europe: the role of EU cohesion policy

Roberto Basile (), Davide Castellani and Antonello Zanfei

No 32/2007, Quaderni del Dipartimento di Economia, Finanza e Statistica from Università di Perugia, Dipartimento Economia

Abstract: In this paper we examine the determinants of location choices of multinational firms in Europe. In particular, we focus on the role of EU Cohesion Policy in attracting foreign investors from both within and outside Europe. Using data on 5,509 foreign subsidiaries established in 50 regions in 8 EU countries over the period 1991-1999, we estimate a mixed logit model of the determinants of MNFs’ location choices. We find that, after controlling for the role of agglomeration economies as well as a number of other regional and country characteristics and allowing for a very flexible correlation pattern among choices, Structural and Cohesion funds allocated by the EU to laggard regions have indeed contributed to attracting multinationals. These policies as well as other determinants play a different role in the case of European investors as opposed to non European ones.

Keywords: Europe; Foreign Direct Investments; Location Choice; Mixed Logit Models (search for similar items in EconPapers)
JEL-codes: F23 O52 R30 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2007-04-30
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Location choices of multinational firms in Europe: The role of EU cohesion policy (2008)
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