City Research Online

Abstract

Using six years of firm-level data covering 224 regions of the enlarged European Union, we evaluate the importance to a firm of locating its activities (production, headquarters, R&D, logistics and sales) close together. We find that, after controlling for regional characteristics, being closely located to a previous investment positively affects firm location choice. However, the impact of distance is dependent on the type of investment (production or service). The impact dies out faster for service activities. Finally, we show that a surprisingly positive effect comes from locating a new production plant close to an existing production investment, but in another country.

Publication Type:	Article
Additional Information:	This is the peer reviewed version of the following article: Defever, F. (2012), The spatial organization of multinational firms. Canadian Journal of Economics/Revue canadienne d'économique, 45: 672–697., which has been published in final form at http://dx.doi.org/10.1111/j.1540-5982.2012.01708.x. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.
Publisher Keywords:	Functional fragmentation; vertical linkages; location choice
Subjects:	H Social Sciences > HB Economic Theory
Departments:	School of Policy & Global Affairs > Economics

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