Using data from Ufficio italiano dei cambi for the period 1997-2001, the study analyses the distribution of foreign direct investment (FDI) outflows by sector and local area of origin. It tries to identify which local industrial structures determine a larger propensity to invest abroad, focusing especially on the role of “industrial districts”. Controlling for a set of variables, we do not find any evidence that the presence of districts has a positive impact on FDI, contrary to what happens for exports. FDI outflows are mainly generated from large firms in capital-intensive industries. Beyond contributing to the literature on industrial districts, the results help understanding why Italy’s FDI on GDP ratio is lower than in other advanced economies.
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Find related papers by JEL classification: F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General R11 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Analysis of Growth, Development, and Changes
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