Analyse: By means of econometric tests of patterns of direct investment both within and into Europe, the thesis explores ways in which the activities of multinational enterprises respond to the economic geography of Europe

Geography affects their location decisions in two ways. First it limits their geographical horizon when deciding where to invest. European firms are far more likely to invest in a neighbouring country than they are in a more distant location within their own region

Second, geography tends to lead to a clustering of economic activity in the centre of the European market where the largest share of consumers are located. American firms in Europe locate much of their production for export within the core of the regional market