Siedschlag, Iulia Smith, Donal Turcu, Camelia Zhang, Xiaoheng
Year of Publication:
ESRI Working Paper No. 306
The Economic and Social Research Institute (ESRI), Dublin
We analyse 446 location decisions of foreign affiliates in the R&D sector incorporated in the European Union over 1999-2006. Our results suggest that on average, the location probability increases with the size of demand, agglomeration economies, low production cost, R&D intensity, flexibility of labour markets, access to skilled labour and information technology infrastructure. Our evidence suggests that after controlling for the R&D intensity of regions, European Union's regional policy and country level tax differences have had no significant effects in fostering the attractiveness of regions to R&D foreign investment. We find evidence of geographical structures relevant for the location choice of R&D multinational firms across the European Union. Further, we find that European investors have responded differently to location characteristics in comparison to North American investors.
foreign direct investment internationalisation of R&D location choice conditional logit nested logit European Union