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Heterogeneity of Economic Space: Introduction of the Problem

In: Determinants of FDI Flows within Emerging Economies

Author

Listed:
  • Arkadiusz Mironko

    (University of California
    Erasmus University)

Abstract

Although there is a common understanding that almost all industries are somewhat localized, a number of studies measure the localization levels of FDI and its influence on host economies. That relationship between collocating firms and the formation of centers of economic activity within a country influence the location choices of future entrants into that country (von Thünen, 1826, trans, of 1966; Marshall, 1920; Krugman, 1991). Also, so-called “Marshallian factor” market externalities (David and Rosenbloom, 1990), which include capital stock and size of the labor force and markets, strongly contribute to the growth and competitiveness of urban-industrial agglomerations, thereby enhancing the attractiveness of a region to potential foreign investors. Even earlier than Marshall, Adam Smith (1776) spoke of trade impacts on location decisions, suggesting that trade and location are interrelated and have a significant role in regional economic geography.

Suggested Citation

  • Arkadiusz Mironko, 2014. "Heterogeneity of Economic Space: Introduction of the Problem," Studies in Economic Transition, in: Determinants of FDI Flows within Emerging Economies, chapter 2, pages 4-28, Palgrave Macmillan.
    • Handle: RePEc:pal:stuchp:978-1-137-37216-1_2
    DOI: 10.1057/9781137372161_2
    as

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