Regulatory policy and the location of bio-pharmaceutical foreign direct investment in Europe

► We examine 527 investments in 27 European countries between 2002 and 2009 and find that investors are less likely to choose countries with price controls, after controlling for other determinants of investment. ► We observe a relative decline in investment in countries that increased the stringency of pharmaceutical price regulation during the sample period. ► The relationship between regulation and investment is restricted to non-manufacturing investments and is most robust for those related to administrative functions.