IDEAS home Printed from https://ideas.repec.org/a/taf/regstd/v42y2008i4p505-522.html
   My bibliography  Save this article

Regional Foreign Direct Investment in Manufacturing. Do Agglomeration Economies Matter?

Author

Listed:
  • Angels Pelegrin
  • Catalina Bolance

Abstract

Pelegrin A. and Bolance C. Regional foreign direct investment in manufacturing. Do agglomeration economies matter?, Regional Studies. This paper examines the role played by agglomeration economies as location determinants of regional foreign direct investment (FDI) in manufacturing. The analysis reveals that FDI location is dependent on specific industry traits and that agglomeration economies appear as the strongest pull factors. The model, estimated with panel data, finds evidence, first, that industries with a high level of linkages are attracted to regions with high manufacturing activity, and, second, that locations which accumulate research and development (R&D) activities attract chemical industries. Finally, cost-oriented industries do not value agglomeration economies and their localization emerges as a result of endowment reasons. [image omitted] Pelegrin A. et Bolance C. L'investissement direct etranger regional dans l'industrie - Les economies d'agglomeration, ont-elles de l'importance? Regional Studies. Cet article cherche a examiner le role que jouent les economies d'agglomeration dans la determination de la localisation de l'investissement direct etranger regional industrielle. L'analyse laisse voir que la localisation de l'investissement direct etranger depend des caracteristiques particulieres de l'industrie et que les economies d'agglomeration s'averent les forces motrices les plus puissantes. Estime a partir des donnees provenant d'une enquete a echantillon constant, le modele indique, primo, que les industries qui jouissent d'importantes liaisons se dirigent vers les regions dont l'activite industrielle est forte et, secundo, que les industries chimiques s'installent dans les zones ou s'agglomerent les activites de R et D. Pour conclure, les industries qui mettent l'accent sur les couts n'evaluent pas les economies d'agglomeration, et leur localisation s'explique par des caracteristiques particulieres. Investissement direct etranger Economies d'agglomeration Localisation de l'industrie regionale Caracteristiques industrielles Donnees par enquete a echantillon constant Pelegrin A. und Bolance C. Regionale auslandische Direktinvestitionen in produzierende Betriebe: Spielen Agglomerationswirtschaften eine Rolle? Regional Studies. In diesem Beitrag wird untersucht, welche Rolle Agglomerationswirtschaften als Standortdeterminanten fur regionale auslandische Direktinvestitionen in produzierende Betriebe spielen. Aus der Analyse geht hervor, dass der Standort fur auslandische Direktinvestitionen von spezifischen Branchenmerkmalen abhangt und dass von Agglomerationswirtschaften die starkste Anziehungskraft auszugehen scheint. Aus diesem Modell, das auf Schatzungen anhand von Paneldaten beruht, gehen Belege hervor, dass erstens hochgradig verknupfte Branchen von Regionen mit ausgepragter Produktionstatigkeit angezogen werden, und dass zweitens Standorte, in denen sich F&E-Aktivitaten konzentrieren, Chemiebetriebe anziehen. Kostenorientierte Branchen schliesslich legen keinen Wert auf Agglomerationswirtschaften; hier richtet sich die Standortwahl nach Aspekten der Ausstattung. Auslandische Direktinvestitionen Agglomerationswirtschaften Regionale Produktionsstandorte Branchenmerkmale Paneldaten Pelegrin A. y Bolance C. Inversion directa extranjera regional en manufacturacion ¿Importan las economias de aglomeracion? Regional Studies. En este articulo examinamos el rol desempenado por las economias de aglomeracion como determinantes de ubicacion de la inversion directa extranjera regional en manufacturacion. El analisis indica que la ubicacion de la inversion directa extranjera depende de particularidades especificas en la industria y que las economias de aglomeracion aparecen como los factores mas solidos de atraccion. Con el modelo, segun una estimacion de datos de panel, se demuestra primero que las industrias con un alto nivel de vinculos se ven atraidos por regiones con una alta actividad de manufacturacion y segundo, que las ubicaciones en las que se acumulan las actividades de I + D atraen a las industrias quimicas. Finalmente, las industrias basadas en el coste no valoran las economias de aglomeracion y su ubicacion depende de la dotacion de la region. Inversion directa extranjera Economias de aglomeracion Ubicacion de manufacturacion regional Particularidades de la industria Datos de panel

Suggested Citation

  • Angels Pelegrin & Catalina Bolance, 2008. "Regional Foreign Direct Investment in Manufacturing. Do Agglomeration Economies Matter?," Regional Studies, Taylor & Francis Journals, vol. 42(4), pages 505-522.
    • Handle: RePEc:taf:regstd:v:42:y:2008:i:4:p:505-522
    DOI: 10.1080/00343400701543157
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/00343400701543157
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00343400701543157?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Peter J. Buckley & Mark Casson, 1991. "The Future of the Multinational Enterprise," Palgrave Macmillan Books, Palgrave Macmillan, edition 0, number 978-1-349-21204-0.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ford, Timothy C. & Rork, Jonathan C., 2010. "Why buy what you can get for free? The effect of foreign direct investment on state patent rates," Journal of Urban Economics, Elsevier, vol. 68(1), pages 72-81, July.
    2. Neil Foster & Robert Stehrer, 2009. "Sectoral Productivity, Density and Agglomeration in the Wider Europe," Spatial Economic Analysis, Taylor & Francis Journals, vol. 4(4), pages 427-446.
    3. Claver-Cortés, Enrique & Marco-Lajara, Bartolome & Manresa-Marhuenda, Encarnación & García-Lillo, F. & Seva-Larrosa, Pedro, 2017. "Location Decisions and Agglomeration Economies: Domestic and Foreign Companies," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 39, pages 99-135.
    4. Basanta K Pradhan & Rashmi Rastogi, 2015. "Mineral Resource Endowments and Investment Destinations: A Panel Data Analysis of Indian States," IEG Working Papers 354, Institute of Economic Growth.
    5. Peter Mayerhofer & Oliver Fritz & Dieter Pennerstorfer, 2010. "Dritter Bericht zur internationalen Wettbewerbsfähigkeit Wiens," WIFO Studies, WIFO, number 42430, February.
    6. Gary A.S. Cook & Naresh R. Pandit, 2014. "Agglomeration and flows of outward direct investment: an analysis of financial services in the United Kingdom," Chapters, in: Charlie Karlsson & Börje Johansson & Roger R. Stough (ed.), Agglomeration, Clusters and Entrepreneurship, chapter 3, pages 52-65, Edward Elgar Publishing.
    7. Angels Pelegrín & Catalina Bolancé, 2011. "Offshoring and company characteristics: some evidence from the analysis of Spanish firm data," Working Papers 2011/16, Institut d'Economia de Barcelona (IEB).
    8. 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.
    9. 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.
    10. Angels Pelegrín & Catalina Bolancé, 2011. "Offshoring and company characteristics: some evidence from the analysis of Spanish firm data," Working Papers 2011/16, Institut d'Economia de Barcelona (IEB).
    11. Àngels Pelegrín Solé & Catalina Bolance Losilla, 2010. "International industry migration and firm characteristics: some evidence from the analysis of firm data," Working Papers 2010/20, Institut d'Economia de Barcelona (IEB).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Iamsiraroj, Sasi, 2016. "The foreign direct investment–economic growth nexus," International Review of Economics & Finance, Elsevier, vol. 42(C), pages 116-133.
    2. Asmund Rygh & Gabriel R. G. Benito, 2018. "Capital Structure of Foreign Direct Investments: A Transaction Cost Analysis," Management International Review, Springer, vol. 58(3), pages 389-411, June.
    3. Fumihiko Isada, 2021. "Changes in the International Network of Japanese Electronics Manufacturers," International Journal of Business and Management, International Institute of Social and Economic Sciences, vol. 9(1), pages 47-62, May.
    4. Arora, Ashish & Fosfuri, Andrea, 1999. "Exploring the internalization rationale for international investment: wholly owned subsidiary versus technology licensing in the worldwide chemical industry," DEE - Working Papers. Business Economics. WB 6430, Universidad Carlos III de Madrid. Departamento de Economía de la Empresa.
    5. Blomström, Magnus & Kokko, Ari, 2003. "Human Capital and Inward FDI," CEPR Discussion Papers 3762, C.E.P.R. Discussion Papers.
    6. Andersson, Ulf & Dasí, Àngels & Mudambi, Ram & Pedersen, Torben, 2016. "Technology, innovation and knowledge: The importance of ideas and international connectivity," Journal of World Business, Elsevier, vol. 51(1), pages 153-162.
    7. Tatiana M. C. Monteiro & Maria do Rosário A. Moreira & Paulo S. A. Sousa, 2013. "Relationship between Firm Size and Export Performance: An Exploratory Analysis," Economics and Management Research Projects: An International Journal, Open Access International Journals, vol. 3(1), pages 9-23, December.
    8. Bürgel, Oliver & Fier, Andreas & Licht, Georg & Murray, Gordon & Nerlinger, Eric A., 1998. "The internationalisation of British and German start-up companies in high-technology industries," ZEW Discussion Papers 98-34, ZEW - Leibniz Centre for European Economic Research.
    9. Birgitte Grøgaard & Asmund Rygh & Gabriel R. G. Benito, 2019. "Bringing corporate governance into internalization theory: State ownership and foreign entry strategies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(8), pages 1310-1337, October.
    10. Kalpana Tokas & Kartik Yadav, 2023. "Foreign Ownership and Corporate Social Responsibility: The Case of an Emerging Market," Global Business Review, International Management Institute, vol. 24(6), pages 1302-1325, December.
    11. Teixeira, Aurora A.C. & Tavares-Lehmann, Ana Teresa, 2014. "Human capital intensity in technology-based firms located in Portugal: Does foreign ownership matter?," Research Policy, Elsevier, vol. 43(4), pages 737-748.
    12. Anthony Goerzen & Stephen Sapp & Andrew Delios, 2010. "Investor Response to Environmental Risk in Foreign Direct Investment," Management International Review, Springer, vol. 50(6), pages 683-708, December.
    13. Munjal, Surender & Requejo, Ignacio & Kundu, Sumit K., 2019. "Offshore outsourcing and firm performance: Moderating effects of size, growth and slack resources," Journal of Business Research, Elsevier, vol. 103(C), pages 484-494.
    14. Simona Iammarino & Francesca Sanna-Randaccio & Maria Savona, 2007. "The perception of obstacles to innovation. Multinational and domestic firms in Italy," Working Papers of BETA 2007-12, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    15. Mutinelli, Marco & Piscitello, Lucia, 1998. "The entry mode choice of MNEs: an evolutionary approach," Research Policy, Elsevier, vol. 27(5), pages 491-506, September.
    16. Hao Liang & Bing Ren & Haikun Zhu, 2011. "Revisiting the OLI Paradigm: The Institutions, the State, and China's OFDI," CESifo Working Paper Series 3642, CESifo.
    17. Greene, William H. & Hornstein, Abigail S. & White, Lawrence J., 2009. "Multinationals do it better: Evidence on the efficiency of corporations' capital budgeting," Journal of Empirical Finance, Elsevier, vol. 16(5), pages 703-720, December.
    18. Mudambi, Ram & Paul, Chris, 2003. "Domestic drug prohibition as a source of foreign institutional instability: an analysis of the multinational extralegal enterprise," Journal of International Management, Elsevier, vol. 9(3), pages 335-349.
    19. Timothy Fisher & Malik Ranasinghe, 2001. "Culture and foreign companies' choice of entry mode: the case of the Singapore building and construction industry," Construction Management and Economics, Taylor & Francis Journals, vol. 19(4), pages 343-353.
    20. George Anastassopoulos, 2003. "MNE subsidiaries versus domestic enterprises: an analysis of their ownership and location-specific advantages," Applied Economics, Taylor & Francis Journals, vol. 35(13), pages 1505-1514.

    More about this item

    Keywords

    R12; F21; F23;
    All these keywords.

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:regstd:v:42:y:2008:i:4:p:505-522. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CRES20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.