run globalization strategy by a firm. Further, the presence within an economy of an internationally competitive manufacturer or service provider can raise the overall performance of competing firms within a domestic market (Shihata, 1987).
Many states, recognizing the benefits discussed above, have in recent years made a concerted effort to attract FDI by establishing lucrative investment incentive programs. Such programs often include the availability of tax holidays, inexpensive financing, and land at reduced prices (Brittan, 1995).
OECD published data indicate that FDI by OECD-based firms increased each year from 1993 through 1998 ("Recent trends," 1999). In the contemporary environment, a growing number of firms view foreign expansion through direct investment as a necessity, with the objective being to achieve more effective access in markets where the investor-firm is underrepresented (Engering, 1996). In many instances, such investments have the effect of leading to increased trade flows, an indication that investment and trade flows frequently interact in a complementary manner. The growing awareness by firms of the need for foreign investment is matched by competition among host countries to attract such investment (Witherell, 1997).
The findings of the research performed for this examination of nine European cities in relation to the motiviations for decisions by MNEs are presented in discussions specific to each of the nine European cities considered in this examination. Information concerning the characteristics of the cities and the countries of which they are a part, as those characteristics are relevant to the motivation of MNEs to locate facilities in foreign sites, is presented. Additionally, where available, specific MNE location decisions involving the cities are discussed.
Assessment of Nine European Cities in Relation to Their Attractiveness to MNEs for the Location of Facilities
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