Multinationals' Location Choice, Agglomeration Economies and Public Incentives

GEP Research Paper No. 02/33

35 Pages Posted: 16 Jul 2003

See all articles by Holger Görg

Holger Görg

University of Kiel; Kiel Institute for the World Economy

Salvador Barrios

European Commission, JRC - IPTS

Eric Strobl

Ecole Polytechnique, Paris - Department of Economic Sciences; IZA Institute of Labor Economics

Date Written: December 2002

Abstract

We study the regional location of multinationals in Ireland since the 1970s by focusing on the role played by agglomeration economies and public incentives 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 much more laissez-faire approach to regional policy and when the primary industrial policy emphasis was on attracting high-tech firms into Ireland in general. 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.

Keywords: multinational location, agglomeration economies, public incentives, regional policy, nested logit

JEL Classification: F23, R38

Suggested Citation

Gorg, Holger and Barrios, Salvador and Strobl, Eric, Multinationals' Location Choice, Agglomeration Economies and Public Incentives (December 2002). GEP Research Paper No. 02/33, Available at SSRN: https://ssrn.com/abstract=410767 or http://dx.doi.org/10.2139/ssrn.410767

Holger Gorg (Contact Author)

University of Kiel ( email )

Olshausenstr. 40
D-24118 Kiel, Schleswig-Holstein 24118
Germany

Kiel Institute for the World Economy ( email )

P.O. Box 4309
Kiel, Schleswig-Hosltein D-24100
Germany

Salvador Barrios

European Commission, JRC - IPTS ( email )

Edificio Expo
C/ Inca Garcilaso s/n
Seville, 41092
Spain
34 954 48 82 08 (Phone)
34 954 48 82 08 (Fax)

Eric Strobl

Ecole Polytechnique, Paris - Department of Economic Sciences ( email )

Ecole Polytechnique
Department of Economics
Paris, 75005
France

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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