2010
DOI: 10.1016/j.regsciurbeco.2009.08.003
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Network and border effects: Where do foreign multinationals locate in Germany?

Abstract: This study assesses the determinants of location choices of foreign multinational firms at the level of German federal states. Adjacency and existing firm networks are assumed to influence the investors' profits in a given location by overcoming informational disadvantages when entering the new market. A conditional and a nested logit model resemble the structure of the location choice process of individual investors well. By using affiliate-level data between 1997 and 2005, the results confirm that firms reac… Show more

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Cited by 50 publications
(38 citation statements)
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“…This result suggests that the corporate tax rate in a country has no significant effect on the location of R&D activities by multinationals in regions of that country over and above other determinants of the location choice. Basile et al (2008) and Spies (2010) also find an insignificant effect of the corporate tax on the location choice of multinational firms.…”
Section: Conditional Logit Modelsmentioning
confidence: 96%
“…This result suggests that the corporate tax rate in a country has no significant effect on the location of R&D activities by multinationals in regions of that country over and above other determinants of the location choice. Basile et al (2008) and Spies (2010) also find an insignificant effect of the corporate tax on the location choice of multinational firms.…”
Section: Conditional Logit Modelsmentioning
confidence: 96%
“…For instance, Crozet et al (2004) find a positive effect on fdi in France whatever the country of origin of firms. When studying fdi in Germany, Spies (2010) always find a positive effect of market potential when conducting estimations for each industry separately. Pusterla and Resmini (2007), who focus on fdi in the NUTS 2 regions in four Eastern European countries, find that both local manufacturing employment and market potential variables positively affect fdi, although most of the impact is on low-tech industries and not on high-tech ones.…”
Section: Discrete Location Choice Modelsmentioning
confidence: 96%
“…For instance, past fdi is found to attract Japanese affiliates in European regions (Head and Mayer, 2004), and to induce both acquisitions and greenfield investments in Italy (Basile, 2004). Past investment also has an influence in both low-and high-tech industries in Germany (Spies, 2010), Eastern European countries (Pusterla and Resmini, 2007), and Ireland (Barrios et al, 2006). Basile et al (2008) find for European regions a positive effect of foreign presence on both European and non-European fdi.…”
Section: Discrete Location Choice Modelsmentioning
confidence: 97%
“…4 The first year covered by the dataset (2003) is used as the basis for the calculation of the (lagged) cumulative number of investments and therefore is not included in the empirical analysis. The nested logit procedure only takes into account regions chosen at least once as investment destinations (Spies, 2010).…”
mentioning
confidence: 99%