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Location Decisions of Non-Bank Financial Foreign Direct Investment: Firm-Level Evidence from Europe
File(s)
File | Description | Size | Format | |
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WP15_26.pdf | 371.55 KB |
Author(s)
Date Issued
November 2015
Date Available
06T09:18:54Z November 2015
Abstract
The non-bank financial sector in the euro area has more than doubled in size over the last decade reflecting the substantial growth in shadow banking activities. However, a large proportion of the non-bank financial sector remains unmapped as granular balance sheet information is not available for almost half of the sector. Motivated by these data gaps and employing firm-level data, this paper examines the location decisions of newly incorporated foreign affiliates in the non-bank financial sector across 27 European countries over the period 2004 to 2012. The probability of a country being chosen as the location for a new foreign affiliate is found to be negatively associated with higher corporate tax rates and geographic distance but increases with the size and financial development of the host country. The financial regulatory regime in the host country and gravity related controls such as the home and host country sharing a common legal system, language, border and currency are also found to impact the likelihood of non-bank financial FDI.
Type of Material
Working Paper
Publisher
University College Dublin. School of Economics
Start Page
1
End Page
42
Series
UCD Centre for Economic Research Working Paper Series
WP2015/26
Classification
F23
F65
G23
G32
Language
English
Status of Item
Not peer reviewed
This item is made available under a Creative Commons License
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