Attractiveness factors of production and innovation sites and head offices in Europe

Given the resulting synergies, companies tend to co-locate their production units and innovation centres within the same territory. Indeed, for a company, the presence of a production centre in France increases the probability of setting up an innovation centre by approximately 74%. In return, the presence of an innovation centre in France increases the likelihood of setting up a production centre by about 62%.

Another determining factor in the choice of location is the tax environment. France has a high corporate income tax and production tax rates. In return, it offers significant tax incentives for R&D through a generous research tax credit system. If France had the same production tax level as its partners, its share in the total number of production site creations by non-European multinationals in Europe would increase by 18%. If corporate tax rates were harmonized in Europe, France's share of company head offices would increase by 70% to achieve 13% of the total. If this were completed with the harmonization of production taxes, head offices' increase would be over 130%, reaching 17% of the total number. Conversely, its share in innovation centres set up by foreign multinationals could decrease by 30% if all European countries adopted the same level of R&D tax aid.

These results need to be confirmed and clarified by other studies, particularly in the aim to overcome two of the analysis limitations: on the one hand, the econometric study focuses solely on investments in Europe by non-European companies; on the other hand, the analysis takes into account each location decision in the same way, regardless of the amount of investment, since the latter is only provided in a limited number of cases.