This paper studies the determinants of location choice by foreign investors in France using a sample of almost 4000 foreign investments over 10 years and 92 locations. Concerning 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. Finally, we identify a ‘learning process’ of FDI, the location decisions becoming more remote from the country of origin during the period we study.
- Conditional logit
- Industrial location
- Nested logit
- Regional policy
CROZET, M. D., MAYER, T., & MUCCHIELLI, J-L. (2004). How do firms agglomerate? A study of FDI in France. Regional Science and Urban Economics, 34(1), 27-54. https://doi.org/10.1016/S0166-0462(03)00010-3