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local industrial systems and the location of FDI in Italy

Author

Listed:
  • Lisa De Propris
  • Nigel Driffield
  • Stefano Menghinello

Abstract

This article investigates the determinants of foreign direct investment (FDI) location across Italian provinces. Specifically it examines the relationship between industry-specific local industrial systems and the location of inward FDI. This extends previous analysis beyond the mere density of activity, to illustrate the importance of the specific nature of agglomerations in attracting inward investment. The article develops a model of FDI location choice using a unique FDI database stratified by industry and province. The results also suggest that the importance of agglomeration differs between industries, and offers some explanation for this.

Suggested Citation

  • Lisa De Propris & Nigel Driffield & Stefano Menghinello, 2005. "local industrial systems and the location of FDI in Italy," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 12(1), pages 105-121.
  • Handle: RePEc:taf:ijecbs:v:12:y:2005:i:1:p:105-121 DOI: 10.1080/1357151042000323085
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    References listed on IDEAS

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    1. Paulo Guimarães & Octávio Figueirdo & Douglas Woodward, 2003. "A Tractable Approach to the Firm Location Decision Problem," The Review of Economics and Statistics, MIT Press, pages 201-204.
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    Citations

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    Cited by:

    1. Marco Bellandi & Lisa De Propris, 2012. "Small Firms and Industrial Districts," Chapters,in: Handbook on the Economics and Theory of the Firm, chapter 27 Edward Elgar Publishing.
    2. Giuseppe Tattara, 2009. "The Internationalisation of Production Activities of Italian Industrial Districts," Chapters,in: A Handbook of Industrial Districts, chapter 48 Edward Elgar Publishing.
    3. 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, pages 797-810.
    4. Attilio Di Battista, 2013. "The Role of Geography and Institutions in determining FDI flows into Italian Provinces," ERSA conference papers ersa13p1185, European Regional Science Association.
    5. Renato Redondi & Mariasole Bannò & Marco Mutinelli, 2011. "Air Connectivity and Foreign Direct Investments The economic effects of the introduction of new routes," ERSA conference papers ersa11p249, European Regional Science Association.
    6. 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.
    7. Nunzia Carbonara & Ilaria Giannoccaro, 2014. "Determinants of MNC location choice in industrial districts: an empirical analysis in Italy," Chapters,in: Agglomeration, Clusters and Entrepreneurship, chapter 5, pages 85-102 Edward Elgar Publishing.
    8. Roberto Basile & Luigi Benfratello & Davide Castellani, 2010. "Location Determinants of Greenfield Foreign Investments in the Enlarged Europe: Evidence from a Spatial Autoregressive Negative Binomial Additive Model," Working papers 10, Former Department of Economics and Public Finance "G. Prato", University of Torino.
    9. Anna Maria Ferragina & Fernanda Mazzotta, 2014. "Agglomeration economies and global activities: impact on firm survival," ERSA conference papers ersa14p348, European Regional Science Association.
    10. Bellandi, Marco & De Propris , Lisa, 2015. "Three Generations of Industrial districts," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 32, pages 75-87.
    11. 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.
    12. Roberto Basile & Luigi Benfratello & Davide Castellani, 2012. "Geoadditive models for regional count data: an application to industrial location," ERSA conference papers ersa12p83, European Regional Science Association.
    13. Canello, Jacopo, 2016. "Migrant entrepreneurs and local networks in industrial districts," Research Policy, Elsevier, pages 1953-1964.
    14. Cesare Imbriani & Piergiuseppe Morone & Rosanna Pittiglio & Filippo Reganati, 2012. "Agglomeration economies, local cluster and foreign direct investments a pilot study for Emilia Romagna region," Economics Bulletin, AccessEcon, vol. 32(1), pages 662-674.
    15. Roberto Basile & Luigi Benfratello & Davide Castellani, 2011. "Spatial clustering and nonlinearities in the location of multinational firms," Quaderni del Dipartimento di Economia, Finanza e Statistica 90/2011, Università di Perugia, Dipartimento Economia.
    16. Constantina Kottaridi & Fragkiskos Filippaios & Marina Papanastassiou & Robert Pearce, 2013. "Regional Mix and the Roles of Foreign Subsidiaries: A New Conceptualization and Empirical Evidence on the UK Case," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 63(1-2), pages 47-74, June.

    More about this item

    Keywords

    Local Industrial Systems; Knowledge Sourcing; Agglomeration; Count Data Econometrics; JEL classification: F23; R12;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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