Journal
ECONOMICS LETTERS
Volume 67, Issue 2, Pages 179-186Publisher
ELSEVIER SCIENCE SA
DOI: 10.1016/S0165-1765(99)00269-4
Keywords
relocation; multinationals; investment; sunk costs
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This article is the first to explore the determinants of international relocation of a firm. It is found that labour intensive firms in a highly industrialized and open economy such as Belgium tend to relocate more to other countries than their highly productive capital. intensive counterparts. Access to a global network, firm size, and the rate of innovation have a positive effect on the probability of relocation. Uncertainty has a negative impact on the probability of relocation. The positive effect of firm size and profitability on the relocation decision is clearly distinct from its effect on the exit decision of a firm. (C) 2000 Elsevier Science S.A. All rights reserved. JEL classivication: F21; F23.
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