The Location of Domestic and Foreign Production Affiliates by French Multinational Firms

32 Pages Posted: 1 Feb 2010

See all articles by Isabelle Méjean

Isabelle Méjean

affiliation not provided to SSRN

Thierry Mayer

Université Paris I Panthéon-Sorbonne - TEAM; Ecole Nationale des Ponts et Chaussées (ENPC) - Centre d'Enseignement et de Recherche en Analyse Socio-Economique (CERAS); CEPII, Centre d'Etudes Prospectives et d'Info. Internationales, Paris; Centre for Economic Policy Research (CEPR)

Benjamin Nefussi

National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST)

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Date Written: Janurary 2010

Abstract

Economists interested in location choices usually focus their attention on investments abroad. This neglects the fact that multinational enterprises continue to invest domestically while undertaking foreign expansion. This paper compares investments at home and abroad. Our firm-level dataset shows an important home bias in productive investments. Part of this "excessive" domestic investment is explained by standard determinants of location choices. The interdependence between affiliates of the same industrial group however accounts for the lion's share of the home bias. Moreover, French firms' propensity to invest abroad is positively related to their productivity and the size of their intangible assets.

Keywords: Economic models, Foreign direct investment, France, Industrial investment, Industrial production, Manufacturing sector, Productivity, Transnational corporations

Suggested Citation

Méjean, Isabelle and Mayer, Thierry and Nefussi, Benjamin, The Location of Domestic and Foreign Production Affiliates by French Multinational Firms (Janurary 2010). IMF Working Paper No. 10/22, Available at SSRN: https://ssrn.com/abstract=1544716

Isabelle Méjean (Contact Author)

affiliation not provided to SSRN

No Address Available

Thierry Mayer

Université Paris I Panthéon-Sorbonne - TEAM ( email )

106-112 boulevard de l'hôpital
Cedex 13 Paris, P75647
France

HOME PAGE: http://team.univ-paris1.fr/teamperso/mayer/thierry.htm

Ecole Nationale des Ponts et Chaussées (ENPC) - Centre d'Enseignement et de Recherche en Analyse Socio-Economique (CERAS) ( email )

28, rue des Saints-Peres
75007 Paris
France
+33 1 4407 8267 (Phone)
+33 1 4407 8267 (Fax)

CEPII, Centre d'Etudes Prospectives et d'Info. Internationales, Paris ( email )

9 Rue Georges Pitard
Paris Cedex 15, F-75015
France

HOME PAGE: http://www.cepii.fr/anglaisgraph/pagepers/mayer.htm

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Benjamin Nefussi

National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST) ( email )

15 Boulevard Gabriel Peri
Malakoff Cedex, 1 92245
France

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