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The Determinants of Inward Foreign Direct Investment in Business Services across European Regions

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  • Davide Castellani
  • Valentina Meliciani
  • Loredana Mirra

Abstract

C astellani D., M eliciani V. and M irra L. The determinants of inward foreign direct investment in business services across European regions, Regional Studies . The role of forward linkages with manufacturing sectors and other service sectors as attractors of business services foreign direct investment (FDI) is studied at the regional level. Using data on 146 NUTS-2 regions, it is found that regions specialized in those (manufacturing) sectors that are high potential users of business services attract more FDI in the business services than other regions. Results are robust to the inclusion of the traditional determinants of foreign investments at the regional level as well as to controls for spatial dependence. The results suggest that regional policies aimed at attracting foreign investors in the business service industry might prove ineffective in the absence of a pre-existing local intermediate demand.

Suggested Citation

  • Davide Castellani & Valentina Meliciani & Loredana Mirra, 2016. "The Determinants of Inward Foreign Direct Investment in Business Services across European Regions," Regional Studies, Taylor & Francis Journals, vol. 50(4), pages 671-691, April.
    • Handle: RePEc:taf:regstd:v:50:y:2016:i:4:p:671-691
    DOI: 10.1080/00343404.2014.928677
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    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)
    • L80 - Industrial Organization - - Industry Studies: Services - - - General
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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