University of Lausanne. Faculty of Business and Economics
Proceedings of the twelfth ETSG annual conference (online) pages:1-16
ETSG edition:12 location:University of Lausanne, Switzerland date:9-11 September 2010
The impact of location factors has, thus far, been studied predominantly for aggregated FDI flows, but rarely for more disaggregated investment types. Recently, however, the literature recognizes that results for firm location might vary between different investment types. For example, Swenson (2000) for the US and Overesch and Wamser (2009) for German firms, find that the tax sensitivity of multinationals differs depending on the type of firm. This paper focuses on the effects of location determinants as taxes, agglomeration rents, production factors and infrastructure on three different investment types in Europe: acquisitions, joint ventures and greenfield investments. The novelty of this paper is the focus on the EU as a whole as well as on a large set of location determinants. Firm-level data are collected from the Zephyr and Amadeus (Bureau Van Dijck) databases. We find that agglomeration rents and taxes play a larger role for greenfield investments than for acquisitions and joint ventures. Our results imply different location determinants for different investment types in Europe.