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How do Firms Agglomerate? A Study of FDI in France

Author

Listed:
  • Matthieu Crozet

    (TEAM - Université Paris 1, CNRS)

  • Thierry Mayer

    (TEAM - Université Paris 1, CNRS)

  • Jean-Louis Mucchielli

    (TEAM - Université Paris 1, CNRS)

Abstract

This paper studies the determinants of location choice by foreign investors in France. A new sample of almost 4000 location choices over 10 years and 92 administrative locations is used to measure two important issues: To what extent do foreign investors cluster spatially and are the decision makers sensitive to investment incentives? Concerning the agglomeration effects, we find very strong evidence of positive spillovers between firms and identify the countries of origin and the industries for which those spillovers are the most substantial. Concerning promotion policies, we find very little evidence of any positive impact of either the national or European regional policy on location choices. Finally, we identify for some European countries a "learning process" of foreign direct investment, the location decisions gradually becoming more remote from the country of origin during the period we study

Suggested Citation

  • Matthieu Crozet & Thierry Mayer & Jean-Louis Mucchielli, 2000. "How do Firms Agglomerate? A Study of FDI in France," Cahiers de la Maison des Sciences Economiques bla00050, Université Panthéon-Sorbonne (Paris 1).
    • Handle: RePEc:mse:wpsorb:bla00050
    DOI: 10.1016/S0166-0462(03)00010-3
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    More about this item

    Keywords

    Industrial location; conditional logit; FDI; regional policy;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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