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On the Relative Importance of Agglomeration Economies in the Location of FDI Across British Regions

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  • Jonathan Jones
  • Colin Wren

Abstract

The paper examines the relative importance for industrial location of production linkages and knowledge spillovers, distinguishing between intermediate and non-intermediate goods that are backwards or forwards in nature. A novel approach is used to construct proxies for non-intermediate goods at a sub-national industry level based on an Input-Output transaction table. Taking data on location decisions by foreign-owned plants across British regions over 1985-2007, the paper finds support for the new economic geography explanation of location based on linkages over that due to spillovers. However, the importance of intermediate and non-intermediate linkages differs between manufacturing and service industries.

Suggested Citation

  • Jonathan Jones & Colin Wren, 2011. "On the Relative Importance of Agglomeration Economies in the Location of FDI Across British Regions," SERC Discussion Papers 0089, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:sercdp:0089
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    Cited by:

    1. Colin Wren, 2011. "Geographic Concentration and the Temporal Scope of Agglomeration Economics: An Index Decomposition," SERC Discussion Papers 0094, Centre for Economic Performance, LSE.
    2. Wren, Colin, 2012. "Geographic concentration and the temporal scope of agglomeration economies: An index decomposition," Regional Science and Urban Economics, Elsevier, vol. 42(4), pages 681-690.
    3. Wren, Colin, 2011. "Geographic concentration and the temporal scope of agglomeration economics: an index decomposition," LSE Research Online Documents on Economics 58351, London School of Economics and Political Science, LSE Library.

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    More about this item

    Keywords

    Industrial location; agglomeration economies; intermediate goods; FDI;
    All these keywords.

    JEL classification:

    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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