How Do Firms Agglomerate? A Study of FDI in France

37 Pages Posted: 11 Jun 2003

See all articles by Matthieu Crozet

Matthieu Crozet

Université Paris I Panthéon-Sorbonne - TEAM

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)

Jean-Louis Mucchielli

Université Paris I Pantheon-Sorbonne

Date Written: April 2003

Abstract

This Paper studies the determinants of location choice by foreign investors in France. A new sample of almost 4000 location choices over ten 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 provided through regional policies? Concerning the agglomeration effects, we find very strong evidence of positive spillovers between firms and identify detailed patterns of clustering assessing for instance the countries of origin and the industries for which those spillovers are the most substantial. Concerning regional 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.

Keywords: Industrial location, conditional logit, nested logit, regional policy, foreign direct investment

JEL Classification: F23, R30, R58

Suggested Citation

Crozet, Matthieu and Mayer, Thierry and Mucchielli, Jean-Louis, How Do Firms Agglomerate? A Study of FDI in France (April 2003). CEPR Discussion Paper No. 3873. Available at SSRN: https://ssrn.com/abstract=413460

Matthieu Crozet

Université Paris I Panthéon-Sorbonne - TEAM ( email )

106-112 boulevard de l'hôpital
Cedex 13 Paris, P75647
France
+33 1 4407 8267 (Phone)
+33 1 4407 8267 (Fax)

Thierry Mayer (Contact Author)

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

Jean-Louis Mucchielli

Université Paris I Pantheon-Sorbonne ( email )

106-112 boulevard de l'hôpital
Cedex 13 Paris, P75647
France
+33 1 4407 8267 (Phone)
+33 1 4407 8267 (Fax)

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