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N° 264 |
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| February 2007 |
| Locating in France or Abroad: the Choice of French Firms |
Thierry Mayer
Isabelle Méjean
Benjamin Nefussi |
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| The number of subsidiaries created abroad by French manufacturing firms has strongly increased during the lastgreatly in fifteen years.
In a globalized economy, companies tend more and more to locate more and more abroad to get closer to dynamic markets and take
advantage of lower costs. However, a model explaining location choices of location that integrates these phenomena brings out a major
bias in favor of the home territory. The probability of a medium-sized firm creating a subsidiary in France is ten times higher than of
it doing so in a country that is comparable in terms of market, production and transaction costs (distance, language, etc.). This bias can
be explained in large part by the density of financial and commercial relations that a firm has in its own country. It is tending to decline
insofar as the burgeoning number of foreign subsidiaries abroad is gradually building up this type of network in the countries of location. |
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