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Multinationals' Location Choice, Agglomeration Economies, and Public Incentives

Author

Listed:
  • Salvador Barrios

    (European Commission, Directorate General for Economic and Financial Affairs, Brussels, Belgium, salvador.barrios@cec.eu.int)

  • Holger Görg

    (Leverhulme Centre for Research on Globalisation and Economic Policy (GEP), University of Nottingham, United Kingdom, holger.gorg@nottingham.ac.uk)

  • Eric Strobl

    (Ecole Polytechnique, Département de Sciences Economiques, Palaiseau, France, eric.strobl@u-paris10.fr)

Abstract

We study the regional location decision of multinationals in Ireland since the 1970s by focusing on the role played by agglomeration economies and by a distinct change in regional policy intent on dispersing industrial activity to the more disadvantaged areas of Ireland. We find that regional policy has only been effective in attracting low-tech firms to the disadvantaged areas during the time when there was a more indirect approach to regional policy. Our results also show that hi-tech firms spread more evenly across the country and that urbanization economies were for these firms a more important locational determinant than public incentives.

Suggested Citation

  • Salvador Barrios & Holger Görg & Eric Strobl, 2006. "Multinationals' Location Choice, Agglomeration Economies, and Public Incentives," International Regional Science Review, , vol. 29(1), pages 81-107, January.
    • Handle: RePEc:sae:inrsre:v:29:y:2006:i:1:p:81-107
    DOI: 10.1177/0160017605281516
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    More about this item

    Keywords

    multinationals; location; public incentives; Ireland;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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