- New Horizons in International Business series
Edited by Jean-Louis Mucchielli and Thierry Mayer
Chapter 2: Globalization, agglomeration and FDI location: the case of French firms in Europe
2. Globalization, agglomeration and FDI location: the case of French ﬁrms in Europe Jean-Louis Mucchielli and Florence Puech INTRODUCTION 2.1 Even though French ﬁrms started to invest abroad only recently (French FDI ﬂows were almost insigniﬁcant before the second half of the 1980s), nowadays France plays an important role in the world with its international investments. Despite an important decline of its FDI outﬂows in 2001, France became the second most important investor ($82.8 billion) behind the USA (UNCTAD, 2002). However, multinational ﬁrms’ location strategies are generally developed by a concentric process illustrated by a progressive international diﬀusion of their activities. At the beginning of the internationalization process, plants are settled in border countries and, then, multinationals progressively invest in farther territories. But at the end of 2000, French international investments are still strongly located in the European area: more than the half of the French FDI outwards stock is located in Europe.1 As regards determinants of ﬁrms’ internationalization, two approaches are complementary. The ﬁrst is to identify the main incentives which inﬂuence the choice of producing abroad (‘why do ﬁrms internationalize their activities?’). The second concerns ﬁrms’ international location choice (‘where do ﬁrms locate?’). With the renewal of interest of spatial economic geography, increasing numbers of articles in economic literature are devoted to multinational ﬁrms’ location. An important part of these recent studies emphasizes the phenomenon of FDI agglomeration (see Ferrer, 1998, for French FDI in European regions; Ford and Strange, 1999, or...
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