Regulations and location choices of top R&D investors worldwide

tThis paper explores how the interaction of different framework conditions affect the way in which topcorporate R&D investors organise their cross-border operations worldwide. The analysis uses location-specific aspects, socio-economic factors and other controls common in the economic geography literatureto investigate the distribution of a company’s international subsidiaries. The location drivers are esti-mated using a multilevel mixed-effects logistic regression, controlling for both country characteristicsand company specific random effects. Our results confirm that framework conditions, as product marketregulation (PMR) and labour market legislation (EPL), affect the location strategies of top R&D investors.Adding to the literature we also found that: (i) PMR and EPL exert a mutually reinforcing negative effecton the location of subsidiaries, (ii) the effect of EPL is not significant for low levels of PMR, and (iii) barriersto trade and investment is the PMR component with the largest negative effect. Policy implications aredrawn accordingly.