Research Seminar by Panikos GEORGALLIS

Research Seminar by Panikos GEORGALLIS, Assistant Professor, University of Amsterdam 

Not all those who wander are lost: Jurisdiction shopping and foreign entry in policy supported industries

We investigate how industry-specific policy support influences firms’ foreign investment location choices. We argue that policy support leads firms to engage in jurisdiction shopping. We thus expect such support to positively affect firms’ location choice. However, we also argue that this effect varies markedly across firms. Specifically, we advance that a firm’s non-market experience exacerbates the effect of policy support on location choice, and that the effect of non-market experience is more salient than any potential effect of market experience. Finally, our theory suggests that even though policy experience generally enhances firms’ attraction to foreign country policies, the nature of this experience can lead some firms to prefer places with less generous policy support. We test and find support for our predictions by examining foreign investments of firms entering the solar energy industry in the European Union countries over the 2004-2013 period.