Regional Economic Integration and the Location of Multinational Enterprises
A theoretical model of international location choice is analyzed in a context of regional economic integration in which, consistently with the most recent evidence, countries conclude multilateral free trade agreements. Controlling for individual country and industry characteristics, it is found that in such a setup both vertical and horizontal multinational firms benefit from positive profit opportunities, with the interested region experiencing a parallel evolution of trade and FDI flows.
Geography
Link
ftp://ftp.unibocconi.it/pub/RePEc/cri/papers/WP152Altomonte.pdf