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| Author: | Mucchielli, J-L. Yu, P. |
| Title: | MNC's location choice and agglomeration: a comparison between US and European affiliates in China |
| Journal: | Asia Pacific Business Review
2011 : OCT, VOL. 17:4, p. 431-453 |
| Index terms: | Asia China Europe USA foreign investment direct investment multinational companies subsidiary companies manufacturing models |
| Freeterms: | FDI affiliates cultural barriers |
| Language: | eng |
| Abstract: | Multinational corporations (MNCs) of European and U.S. origin encounter greater cultural barriers than Asian MNCs when investing in China. The global economic recession further raises the location risks for MNCs. Based on data from the '2007 Fortune 500' list, conditional logit estimations are performed to test the main determinants of the choices made by 457 U.S. and 537 European manufacturing affiliates located in China from 1995 to 2007. It is found that market size, production costs, agglomeration effects and geographical location have a significant impact on both European and U.S. firms' choices. The preferred strategy of the sample firms is agglomeration. Furthermore, it is also shown that the host sector's technological intensity has a greater impact on U.S. firms than on European ones. |
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