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Foreign Direct Investment and Regional Growth: An Analysis of the Spanish Case

Author

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  • Oscar Bajo-Rubio
  • Carmen Diaz-Mora
  • Carmen Diaz-Roldan

Abstract

Bajo-Rubio O., Diaz-Mora C. and Diaz-Roldan C. Foreign direct investment and regional growth: an analysis of the Spanish case, Regional Studies. The massive increase in foreign direct investment (FDI) inflows following the Spanish integration with the now European Union in 1986 has been one of the most important features shaping the behaviour of the Spanish economy in the last 20 years. This paper assesses the impact of foreign direct investment on regional economic growth following Spain's entry into the European Union, using data for the 17 Spanish regions. The results support the important role played by foreign direct investment in promoting productivity growth over the period analysed, which proves to be robust to several alternative specifications. [image omitted] Bajo-Rubio O., Diaz-Mora C. et Diaz-Roldan C. Investissement etranger direct et croissance regional: une analyse du cas espagnol, Regional Studies. Le massif accroissement des entrees d'investissement etranger direct (IED) apres l'integration espagnole dans l'actuelle Union Europeenne (UE) en 1986, a ete l'un des principaux traits configurant l'evolution de l'economie espagnole des vingt dernieres annees. Dans cet article, nous essayerons d'evaluer l'impact de l'IED sur la croissance economique regionale apres l'entree de l'Espagne dans l'UE, en utilisant des donnees des 17 regions espagnoles. Les resultats confirment l'important role joue par l'IED en favorisant la croissance de la productivite tout au long de la periode analysee, ces resultats etant robustes a diverses specifications alternatives. Croissance economique Investissement etranger direct Regions Bajo-Rubio O., Diaz-Mora C. und Diaz-Roldan C. Auslandische Direktinvestitionen und regionales Wachstum: eine Analyse des Falls von Spanien, Regional Studies. Der massive Anstieg auslandischer Direktinvestitionen in Spanien nach der Integration des Landes in die heutige Europaische Union im Jahr 1986 war eines der wichtigsten Merkmale, die das Verhalten der spanischen Wirtschaft in den letzten zwanzig Jahren pragten. In diesem Beitrag versuchen wir, die Auswirkung der auslandischen Direktinvestitionen auf das regionale Wirtschaftswachstum nach dem EU-Beitritt Spaniens anhand von Daten fur die 17 spanischen Regionen zu bewerten. Die Ergebnisse bekraftigen die wichtige Rolle der auslandischen Direktinvestitionen bei der Forderung des Produktivitatswachstums uber den analysierten Zeitraum - ein Ergebnis, das sich auch in Verbindung mit mehreren alternativen Spezifikationen als robust erweist. Wirtschaftswachstum Auslandische Direktinvestitionen Regionen Bajo-Rubio O., Diaz-Mora C. y Diaz-Roldan C. Inversion extranjera directa y crecimiento regional: un analisis del caso espanol, Regional Studies. El masivo incremento de las entradas de inversion extranjera directa (IED) tras la integracion espanola en la actual Union Europea (UE) en 1986, ha sido uno de los rasgos mas importantes que configuran la evolucion de la economia espanola en los ultimos veinte anos. En este articulo trataremos de evaluar el impacto de la IED sobre el crecimiento economico regional tras la entrada de Espana en la UE, utilizando datos para las 17 regiones espanolas. Los resultados confirman el importante papel desempenado por la IED a la hora de favorecer el crecimiento de la productividad a lo largo del periodo analizado, siendo estos resultados robustos a diversas especificaciones alternativas. Crecimiento economico Inversion extranjera directa Regiones

Suggested Citation

  • Oscar Bajo-Rubio & Carmen Diaz-Mora & Carmen Diaz-Roldan, 2010. "Foreign Direct Investment and Regional Growth: An Analysis of the Spanish Case," Regional Studies, Taylor & Francis Journals, vol. 44(3), pages 373-382.
    • Handle: RePEc:taf:regstd:v:44:y:2010:i:3:p:373-382
    DOI: 10.1080/00343400802508844
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    2. Sheila Chapman & Valentina Meliciani, 2018. "Explaining regional disparities in Central and Eastern Europe : The role of geography and of structural change," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 26(3), pages 469-494, July.
    3. Artelaris, Panagiotis & Arvanitidis, Paschalis & Petrakos, George, 2006. "Theoretical and Methodological Study on Dynamic Growth Regions and Factors Explaining their Growth Performance," Papers DYNREG02, Economic and Social Research Institute (ESRI).
    4. Lutao Ning & Fan Wang, 2018. "Does FDI Bring Environmental Knowledge Spillovers to Developing Countries? The Role of the Local Industrial Structure," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(2), pages 381-405, October.
    5. Ichiro Iwasaki & Keiko Suganuma, 2015. "Foreign direct investment and regional economic development in Russia: an econometric assessment," Economic Change and Restructuring, Springer, vol. 48(3), pages 209-255, November.
    6. Yuandi Wang & Lutao Ning & Jian Li & Martha Prevezer, 2016. "Foreign Direct Investment Spillovers and the Geography of Innovation in Chinese Regions: The Role of Regional Industrial Specialization and Diversity," Regional Studies, Taylor & Francis Journals, vol. 50(5), pages 805-822, May.
    7. Oscar Bajo-Rubio, 2021. "The role of foreign direct investment in growth: Spain, 1964–2013," Applied Economic Analysis, Emerald Group Publishing Limited, vol. 30(90), pages 263-276, October.
    8. Gallardo Ramiro, M V, 2010. "Fundamentos en la toma de decisiones de deslocalización empresarial e inversión internacional [The decision-making process in offshoring and international investment]," MPRA Paper 23259, University Library of Munich, Germany.
    9. Dziemianowicz Wojciech, 2018. "Spatial differences in migration of businesses: The example of Polish regions," Miscellanea Geographica. Regional Studies on Development, Sciendo, vol. 22(3), pages 142-149, September.
    10. Mainer-Casado, Carolina & Fariñas, José Carlos & Moreno, Lourdes, 2018. "The Scope, Scale and Locational Preferences of Spanish Multinationals," MPRA Paper 85766, University Library of Munich, Germany.
    11. Tomasz Dorożyński & Janusz Świerkocki & Wojciech Urbaniak, 2015. "Incentives for Attracting FDI: The Case of the Lodz Region," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 1, pages 147-169.
    12. Gholipour, Hassan Fereidouni & Tajaddini, Reza & Al-mulali, Usama, 2014. "Does personal freedom influence outbound tourism?," Tourism Management, Elsevier, vol. 41(C), pages 19-25.
    13. Gál, Zoltán, 2019. "Az FDI szerepe a gazdasági növekedés és a beruházások területi differenciálódásában Magyarországon [The foreign direct investment role in Hungarys economic growth and territorial differentiation of," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(6), pages 653-686.
    14. Ghazouani, tarek, 2018. "Reexamining the Foreign direct investment, Renewable energy consumption and Economic growth nexus: Evidence from a new Bootstrap ARDL test for Cointegration," MPRA Paper 103348, University Library of Munich, Germany, revised 11 Sep 2020.
    15. Bajo-Rubio, Oscar, 2012. "The balance-of-payments constraint on economic growth in a long-term perspective: Spain, 1850–2000," Explorations in Economic History, Elsevier, vol. 49(1), pages 105-117.
    16. Kandogan, Yener, 2012. "Regional foreign direct investment potential of the states within the US," Journal of Economics and Business, Elsevier, vol. 64(4), pages 306-322.
    17. Gutiérrez-Portilla, Paula & Maza, Adolfo & Villaverde, José, 2019. "A spatial approach to the FDI-growth nexus in Spain: Dealing with the headquarters effect," International Business Review, Elsevier, vol. 28(6), pages 1-1.
    18. Ning, Lutao & Wang, Fan & Li, Jian, 2016. "Urban innovation, regional externalities of foreign direct investment and industrial agglomeration: Evidence from Chinese cities," Research Policy, Elsevier, vol. 45(4), pages 830-843.
    19. Temiz, Dilek & Gökmen, Aytaç, 2014. "FDI inflow as an international business operation by MNCs and economic growth: An empirical study on Turkey," International Business Review, Elsevier, vol. 23(1), pages 145-154.
    20. Alnoah Abdulsalam & Helian Xu & Waqar Ameer & AL-Barakani Abdo & Jiejin Xia, 2021. "Exploration of the Impact of China’s Outward Foreign Direct Investment (FDI) on Economic Growth in Asia and North Africa along the Belt and Road (B&R) Initiative," Sustainability, MDPI, vol. 13(4), pages 1-16, February.
    21. Gallardo Ramiro, M V, 2010. "Deslocalización empresarial e inversión directa internacional [Offshoring and international investment]," MPRA Paper 23228, University Library of Munich, Germany.
    22. Wittwer, Glyn, 2011. "Water buybacks and drought in the Murray-Darling Basin of Australia: confusing policy and catastrophe," Conference papers 332169, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

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    More about this item

    Keywords

    Economic growth; Foreign direct investment (FDI); Regions;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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