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FDI Inflows, Agglomeration and Host Country Firms' Size: Evidence from Italy

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  • Raffaello Bronzini

Abstract

Bronzini R. (2007) FDI inflows, agglomeration and host country firms' size: evidence from Italy, Regional Studies 41, 963-978. This paper aims to contribute some empirical evidence on the role of localization (specialization) economies, urbanization (diversification) economies and of host country firms' size in attracting foreign direct investment (FDI) within Italian provinces. The analysis is based on a unique territorial data set on foreign investment collected by the Italian Foreign Exchange Office for 23 industrial and service sectors and the 103 Italian provinces in the period 1997-2004. The results show that localization externalities encourage FDI inflows, whereas urbanization economies have no impact on inward foreign investment. Moreover, according to the findings small firms located in the host provinces seem to deter FDI, while the location of big firms appears not to affect foreign investors' decisions. Bronzini R. (2007) L'afflux d'IDE, l'agglomeration et la taille des entreprises du pays d'accueil: des preuves provenant de l'Italie, Regional Studies 41, 963-978. Cet article cherche a apporter des preuves empiriques sur le role des economies de localisation (de specialisation), des economies d'urbanisation (de diversification) et de la taille des entreprises du pays d'accueil quant a l'afflux d'investissement direct etranger (IDE) au sein des provinces italiennes. L'analyse est fondee sur un ensemble unique de donnees territoriales a propos de l'investissement etranger, recueilli par le Service des changes en Italie, pour 23 secteurs industriels et de services et aupres des 103 provinces italiennes entre 1997 et 2004. Les resultats demontrent que les effets externes de localisation s'averent favorables a l'afflux d'IDE, tandis que les economies d'urbanisation n'ont aucun impact sur l'investissement direct etranger. En outre, il semble que, selon ces resultats-ci, les petites entreprises situees dans les provinces d'accueil decouragent l'IDE, alors que l'emplacement des grandes entreprises ne semble pas influer sur les decisions des investisseurs etrangers. Investissement direct etranger Economies d'agglomeration Emplacement des societes multinationales Bronzini R. (2007) Zufluss von Direktinvestitionen aus dem Ausland und Firmengrosse im Gastgeberland: Belege aus Italien, Regional Studies 41, 963-978. Mit diesem Beitrag sollen empirische Belege fur die Frage geliefert werden, welche Rolle Lokalisierungs- bzw. Spezialisierungswirtschaften, Urbanisierungs- bzw. Diversifikationswirtschaften sowie die Firmengrosse im Gastgeberland spielen, wenn es darum geht, in italienischen Provinzen auslandische Direktinvestitionen anzuziehen. Die Analyse basiert auf einem Satz an eindeutigen territorialen Daten uber Auslandsinvestitionen, die vom italienischen Devisenamt im Zeitraum von 1997 bis 2004 fur 23 Industrie- und Dienstleistungssektoren sowie fur die 103 italienischen Provinzen erfasst wurden. Die Ergebnisse zeigen, dass sich die Lokalisierungsexternalitaten fordernd auf den Zufluss von Auslandsdirektinvestitionen auswirken, wahrend die Urbanisierungswirtschaften keinen Einfluss auf eintreffende Auslandsinvestitionen haben. Daruber hinaus scheinen sich laut unseren Ergebnissen kleine Betriebe in den Gastgeberprovinzen abschreckend auf Auslandsdirektinvestitionen auszuwirken, wahrend sich der Standort von Grossunternehmen nicht auf die Entscheidungen auslandischer Investoren auszuwirken scheint. Auslandische Direktinvestitionen Agglomerationswirtschaften Standort multinationaler Konzerne Bronzini R. (2007) Entradas de IDE, aglomeracion y tamanos de empresas en paises huespedes: el ejemplo de Italia, Regional Studies 41, 963-978. El objetivo de este ensayo es aportar pruebas empiricas sobre el rol de las economias de localizacion (especializacion), las economias de urbanizacion (diversificacion) y del tamano de las sociedades en los paises huespedes para atraer inversion directa extranjera (IDE) en las provincias italianas. Este analisis se basa en un solo grupo de datos territoriales sobre la inversion extranjera que la Oficina de Cambio italiana recogio para 23 sectores industriales y servicios y las 103 provincias italianas durante el periodo de 1997 a 2004. Los resultados indican que las externalidades de localizacion estimulan la entrada de IDE mientras que las economias de urbanizaciones no repercuten en la inversion extranjera interior. Asimismo segun nuestras investigaciones, las pequenas empresas ubicadas en provincias huespedes parecen disuadir a la IDE mientras que la ubicacion de las grandes empresas no parece afectar a las decisiones de inversores extranjeros. Inversion directa extranjera Economias de aglomeracion Ubicacion de multinacionales

Suggested Citation

  • Raffaello Bronzini, 2007. "FDI Inflows, Agglomeration and Host Country Firms' Size: Evidence from Italy," Regional Studies, Taylor & Francis Journals, vol. 41(7), pages 963-978.
    • Handle: RePEc:taf:regstd:v:41:y:2007:i:7:p:963-978
    DOI: 10.1080/00343400701281618
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    1. Enrique Claver-Cortés & Bartolomé Marco-Lajara & Pedro Seva-Larrosa & Lorena Ruiz-Fernández & Eduardo Sánchez-García, 2020. "Explanatory Factors of Entrepreneurship in Food and Beverage Clusters in Spain," Sustainability, MDPI, vol. 12(14), pages 1-22, July.
    2. Nielsen, Bo Bernhard & Asmussen, Christian Geisler & Weatherall, Cecilie Dohlmann, 2017. "The location choice of foreign direct investments: Empirical evidence and methodological challenges," Journal of World Business, Elsevier, vol. 52(1), pages 62-82.
    3. Rubini, Lauretta & Pollio, Chiara & Spigarelli, Francesca & Lv, Ping, 2021. "Regional social context and FDI. An empirical investigation on Chinese acquisitions in Europe," Structural Change and Economic Dynamics, Elsevier, vol. 58(C), pages 402-415.
    4. Ilaria Mariotti & Mariachiara Barzotto & Giancarlo Corò & Stefano Saloriani, 2020. "Industrial districts, urban areas or both? The location behaviour of foreign and domestic firms in an Italian manufacturing region," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 64(3), pages 523-546, June.
    5. Anna Maria Ferragina & Fernanda Mazzotta, 2014. "Agglomeration economies and global activities: impact on firm survival," ERSA conference papers ersa14p348, European Regional Science Association.
    6. Gonchar, Ksenia & Marek, Philipp, 2013. "Natural-resource or Market-seeking FDI in Russia? An Empirical Study of Locational Factors Affecting the Regional Distribution of FDI Entries," IWH Discussion Papers 3/2013, Halle Institute for Economic Research (IWH).
    7. Anna Ferragina & Fernanda Mazzotta, 2015. "Agglomeration economies in Italy: impact on heterogeneous firms’ exit in a multilevel framework," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(4), pages 395-440, December.
    8. Giuseppe Tattara, 2009. "The Internationalisation of Production Activities of Italian Industrial Districts," Chapters, in: Giacomo Becattini & Marco Bellandi & Lisa De Propis (ed.), A Handbook of Industrial Districts, chapter 48, Edward Elgar Publishing.
    9. Giulio Cainelli & Eleonora Di Maria & Roberto Ganau, 2011. "Agglomeration, related-variety and internationalisation. Does a relationship exist?," Openloc Working Papers 1114, Public policies and local development.
    10. Sauro Mocetti, 2012. "Educational choices and the selection process: before and after compulsory schooling," Education Economics, Taylor & Francis Journals, vol. 20(2), pages 189-209, February.
    11. Blanc-Brude, Frédéric & Cookson, Graham & Piesse, Jenifer & Strange, Roger, 2014. "The FDI location decision: Distance and the effects of spatial dependence," International Business Review, Elsevier, vol. 23(4), pages 797-810.
    12. Gary A.S. Cook & Hans Lööf & Naresh R. Pandit & Börje Johansson, 2012. "The influence of clustering on MNE location and innovation in Great Britain," Chapters, in: Charlie Karlsson & Börje Johansson & Roger R. Stough (ed.), Entrepreneurship, Social Capital and Governance, chapter 3, pages 53-82, Edward Elgar Publishing.
    13. Jonathan Jones, 2017. "Agglomeration economies and the location of foreign direct investment: A meta-analysis," Journal of Regional Science, Wiley Blackwell, vol. 57(5), pages 731-757, November.
    14. Di Matteo, Dante & Mariotti, Ilaria & Rossi, Federica, 2023. "Transport infrastructure and economic performance: An evaluation of the Milan-Bologna high-speed rail corridor," Socio-Economic Planning Sciences, Elsevier, vol. 85(C).
    15. Xie, En & Reddy, K.S. & Liang, Jie, 2017. "Country-specific determinants of cross-border mergers and acquisitions: A comprehensive review and future research directions," Journal of World Business, Elsevier, vol. 52(2), pages 127-183.
    16. Maktoba Omar & Collins Osei, 2015. "An investigative analysis of the factors influencing degree of involvement in a foreign market," Transnational Marketing Journal, Oxbridge Publishing House, UK, vol. 3(1), pages 45-60, May.
    17. Mariana SEHLEANU, 2017. "Empirical Study Regarding The Factors That Influence Foreign Participation In The Share Capital Of Companies From North-West Region Of Romania," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 143-152, December.
    18. 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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