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The Location of Domestic and Foreign Production Affiliates by French Multinational Firms
Author:
Ms. Isabelle Mejean
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Thierry Mayer null

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Benjamin Nefussi null

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Series:
IMF Working Papers
Volume/Issue:
Volume 2010: Issue 022
Language:
English
Publication Date:
01 Jan 2010
DOI:
https://doi.org/10.5089/9781451962345.001
ISBN:
9781451962345
ISSN:
1018-5941
Pages:
32
Keywords:
WP; fixed cost; standard deviation; dependent variable; investing firm; Location choice; Multinational firms; Conditional logit model; network variable; firm level; multi-national firm; input-producing firm; production establishment; firm's network; choices of affiliate location; Foreign direct investment; Transnational corporations; Productivity; Logit models; Employment; Europe
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Economists interested in location choices usually focus their attention on investments abroad. This neglects the fact that multinational enterprises continue to invest domestically while undertaking foreign expansion. This paper compares investments at home and abroad. Our firm-level dataset shows an important home bias in productive investments. Part of this "excessive" domestic investment is explained by standard determinants of location choices. The interdependence between affiliates of the same industrial group however accounts for the lion's share of the home bias. Moreover, French firms' propensity to invest abroad is positively related to their productivity and the size of their intangible assets.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund