Location Choice Network Patterns of Japanese Multinational Companies in Europe

Abstract

This research investigates network patterns of location choice of multinational companies by using multinomial logit method. It empirically analyses regional economic factors, which were significant for attracting investments of Japanese companies during the last decade, by using the most detailed regional data possible. In addition to previous studies, this paper particularly addresses factors, which follower Japanese companies considered important in their investment decisions. For Japanese multinational company to locate near to other already established company from the same country there could be such reasons as: they tend to follow their business customers or because of existing intra-firm linkages already established in Japan, which they carry on in their investment decisions. The aim of the paper is threefold. Firstly, it analyzes significant regional economic factors, which follower Japanese companies consider important in choosing regions with already established Japanese firms and, secondly, it analyzes those regional economic factors, which are significant for those companies, which choose to locate near to hubs of other Japanese companies. Thirdly, by using distances between regional centers, this paper tries to establish significance of physical distance in establishing hub of Japanese companies. Paper hypotheses that Japanese companies disregard geographical distance in their investment decisions as they create networks of Japanese companies.