Spatial clustering and nonlinearities in the location of multinational firms
AbstractWe propose a semiparametric geoadditive negative binomial model of industrial location which allows to simultaneously address some important methodological issues, such as spatial clustering and nonlinearities, which have been only partly addressed in previous studies. We apply this model to analyze location determinants of inward greenfield investments occurred over the 2003-2007 period in 249 European regions. The inclusion of a geoadditive component (a smooth spatial trend surface) allows to control for omitted variables which induce spatial clustering, and suggests that such unobserved factors may be related to regional policies towards foreign investors Allowing for nonlinearities reveals, in line with theoretical predictions, that the positive effect of agglomeration economies fades as the density of economic activities reaches some limit value.
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Bibliographic InfoPaper provided by Università di Perugia, Dipartimento Economia, Finanza e Statistica in its series Quaderni del Dipartimento di Economia, Finanza e Statistica with number 90/2011.
Length: 36 pages
Date of creation: 02 May 2011
Date of revision:
industrial location; negative binomial models; geoadditive models; european union.;
Find related papers by JEL classification:
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-06-11 (All new papers)
- NEP-CSE-2011-06-11 (Economics of Strategic Management)
- NEP-EUR-2011-06-11 (Microeconomic European Issues)
- NEP-GEO-2011-06-11 (Economic Geography)
- NEP-INT-2011-06-11 (International Trade)
- NEP-URE-2011-06-11 (Urban & Real Estate Economics)
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