Agglomeration Economies and the Location of Foreign Direct Investment: Empirical Evidence from Romania
AbstractRelatively little is known about the determinants of FDI location in transition economies. We exploit the large inflow of FDI into Romania, after the revolution in 1989, to study this question. Using a conditional logit setup, we find that external economies from service agglomeration are the main determinant of FDI-location. An increase in service employment density by 10 percent makes the average Romanian county 11.9 percent more likely to attract a foreign investor. Industry specific foreign and domestic agglomeration economies and labor conflicts also impact FDI-location. Our findings imply that results are sensitive to the inclusion of locational fixed effects.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 5137.
Date of creation: 30 Sep 2007
Date of revision:
Agglomeration economies; foreign direct investment; transition economies;
Other versions of this item:
- Christian Hilber & Ioan Voicu, 2010. "Agglomeration Economies and the Location of Foreign Direct Investment: Empirical Evidence from Romania," Regional Studies, Taylor & Francis Journals, vol. 44(3), pages 355-371.
- R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
- P33 - Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-10-20 (All new papers)
- NEP-GEO-2007-10-20 (Economic Geography)
- NEP-IFN-2007-10-20 (International Finance)
- NEP-TRA-2007-10-20 (Transition Economics)
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