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Evidence on the determinants of foreign direct investment: the case of EU regions

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Author Info

  • Laura CASI

    (Universita degli Studi di Milano and ISLA, Universita Bocconi)

  • Laura RESMINI

    ()
    (Universita della Valle d?Aosta and ISLA, Universita Bocconi)

Abstract

This study analyses the determinants of Foreign Direct Investment (FDI) at regional level. While the determinants of FDI in Europe have been extensively analysed at the country level, the literature on location patterns and on the determinants of FDI at the regional level is only at its beginning. This study follows this line of empirical research by using original data on the number of foreign investments over the 2005-07 period disaggregated by regions of the EU27 and by sectors. We perform a detailed analysis of the location determinants of foreign investments using different econometric specifications in order to consider a large set of variables potentially explaining FDI location. We attempt, on the one hand, to demonstrate whether variables usually employed to explain the determinants of FDI at the country level also influence the location of FDI at the regional level, and on the other hand to identify which locational advantages are able to attract FDI into EU regions. In so doing, we control for firm, sector and spatial heterogeneity in order to capture potential differences in the patterns of location of different kinds of foreign firms.

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Bibliographic Info

Article provided by Centre for European Studies, Alexandru Ioan Cuza University in its journal Eastern Journal of European Studies.

Volume (Year): 1(2) (2010)
Issue (Month): (December)
Pages: 93-118

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Handle: RePEc:jes:journl:y:2010:v:1:p:93-118

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Web page: http://ejes.uaic.ro/
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Keywords: foreign direct investment; region;

References

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  16. Bruce A. Blonigen, 2005. "A Review of the Empirical Literature on FDI Determinants," NBER Working Papers 11299, National Bureau of Economic Research, Inc.
  17. Head, C. Keith & Ries, John C. & Swenson, Deborah L., 1999. "Attracting foreign manufacturing: Investment promotion and agglomeration," Regional Science and Urban Economics, Elsevier, vol. 29(2), pages 197-218, March.
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Cited by:
  1. Dong He & Lillian Cheung & Wenlang Zhang & Tommy Wu, 2012. "How would Capital Account Liberalisation Affect China's Capital Flows and the Renminbi Real Exchange Rates?," Working Papers 092012, Hong Kong Institute for Monetary Research.
  2. Tatomir, Cristina F. & Popovici, Oana, 2011. "Eyes on Romania: what to look when investing here?," MPRA Paper 36140, University Library of Munich, Germany.
  3. Andrea Caragliu & Peter Nijkamp, 2013. "Space and Knowledge Spillovers in European Regions," Tinbergen Institute Discussion Papers 13-148/VIII, Tinbergen Institute.
  4. Davide Castellani & Giulio Giangaspero & Antonello Zanfei, 2013. "Heterogeneity and distance. Some propositions on how differences across regions, firms and functions affect the role of distance in FDI location decisions," Working Papers 1308, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2013.

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