Abstract
This paper considers the link between the local availability of services in a home country and a firm’s decision to become a multinational. This is a highly topical issue, given that many industrialised countries are increasingly becoming services economies and firms become increasingly more globalised. In an analysis of rich firm level data for France we find evidence that the availability of services in the home country indeed has a positive impact on firms’ decisions to become multinationals. This is robust to endogeneity concerns. The result can be interpreted in a simple set up where the local availability of business services improves firm efficiency and, hence, allows firms to overcome sunk costs of investing abroad more easily.
| Original language | English |
|---|---|
| Number of pages | 28 |
| Journal | Review of International Economics |
| Early online date | 13 Jun 2016 |
| DOIs | |
| Publication status | E-pub ahead of print - 13 Jun 2016 |
Keywords
- Business Services
- Foreign Direct Investment
- Multinationals
Access to Document
- Availability of Business Services and Outward Investment: Evidence from French Firms
This is the peer reviewed version of the following article:Availability of business services and outward investment, evidence from French firms which has been published in final form at 10.1111/roie.12238. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.