Andrea Ascani

Economic institutions and the location strategies of European multinationals in their geographic neighborhood

This paper investigates how the location behaviour of Multinational Enterprises (MNEs) is shaped by the economic institutions of the host countries. The analysis covers a wide set of geographically proximate economies with different degrees of integration with the ‘Old’ 15 European Union (EU) members: New Member States, Accession and Candidate Countries, as well as European Neighbourhood Policy (ENP) countries and the Russian Federation. The paper aims to shed new light on the heterogeneity of MNE preferences for the host countries’ regulatory settings (including labour market and business regulation), legal aspects (i.e. protection of property rights and contract enforcement) and the weight of the government in the economy. By employing data on 6,888 greenfield investment projects, the random-coefficient Mixed Logit analysis here applied shows that, while the quality of the national institutional framework is generally beneficial for the attraction of foreign investment, MNEs preferences over economic institutions are highly heterogeneous across sectors and business functions.

What drives European multinationals to the European Union neighbouring countries? A mixed-methods analysis of Italian investment strategies:

This article aims to investigate the economic integration between the European Union and its neighbouring countries by exploring the location drivers of Italian Multinational Enterprises in 33 destination countries including the New Member States of the European Union and the European Neighbouring Countries. The article compares market- and efficiency-seeking motivations with asset-seeking strategies. The analysis is based on a mixed-methods approach. The quantitative analysis assesses the location determinants of 518 Italian Multinational Enterprises that invested in the area in the years 2003–2008, whereas qualitative information on strategic location decisions is collected by means of in-depth interviews with executives in two of the largest Italian Multinational Enterprises active in the region. Market-seeking considerations are still predominant drivers of location decisions in European Union Neighbouring Countries together with resource-seeking motivations. However, different Multinational Enterprises develop diversified strategies to increase their access to these areas, which are of increasing interest for global investors.