Chen, Maggie Xiaoyang and Moore, Michael (2009): Location decision of heterogeneous multinational firms. Published in: Journal of International Economics , Vol. 2, No. 80 (March 2010): pp. 188-199.
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We examine how multinational firms with heterogeneous total factor productivity (TFP) self-select into different host countries. Both aggregate- and firm-level estimates suggest that more productive French firms are more likely than their less efficient competitors to invest in relatively tough host countries. Countries with a smaller market potential, higher fixed costs of investment or lower import tariffs tend to have higher cutoff productivities and attract a greater proportion of productive multinationals. This self-selection mechanism remains largely robust when we control for unobserved firm and country heterogeneity and address the potential TFP endogeneity.
|Item Type:||MPRA Paper|
|Original Title:||Location decision of heterogeneous multinational firms|
|Keywords:||multinational firm, location decision, firm heterogeneity, productivity|
|Subjects:||F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms; International Business
F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment; Long-Term Capital Movements
D - Microeconomics > D2 - Production and Organizations > D24 - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
|Depositing User:||Maggie Chen|
|Date Deposited:||17. Sep 2011 23:02|
|Last Modified:||13. Feb 2013 12:01|
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