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

Basile, R., Castellani, D. and Zanfei, A. (2008) Location choices of multinational firms in Europe: the role of EU cohesion policy. Journal of International Economic Law, 74 (2). pp. 328-340. ISSN 1369-3034

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To link to this item DOI: 10.1016/j.jinteco.2007.08.006


Using data on 5509 foreign subsidiaries established in 50 regions of 8 EU countries over the period 1991–1999, we estimate a mixed logit model of the location choice 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. 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.

Item Type:Article
Divisions:Henley Business School > International Business and Strategy
ID Code:44408
Publisher:Oxford University Press

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