Sourcing patterns of foreign-owned multinational subsidiaries in Europe

This paper investigates the determinants of the international sourcing propensities of foreign-owned multinational (MNE) subsidiaries in four European Union host countries. Major findings concern the impact of subsidiary roles and economic integration on international sourcing patterns. Regional and global integration are leading to a greater import-orientation among MNE subsidiaries, including Product Mandate firms that are assumed to be strongly embedded within host economies. The results cast doubts on existing criteria for inward foreign direct investment (FDI) attraction. Policy implications are developed relating to the attraction of inward FDI and to corporate development policies.