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Regional integration, foreign direct investment, and regional development

Author

Listed:
  • Ari Kokko

    (Stockholm School of Economics)

  • Patrik Gustavsson

    (Stockholm School of Economics)

Abstract

Stressing that the liberalisation of international trade and investment may lead to a geographical concentration of economic activity, this paper discusses the scope for FDI as an instrument of regional policy aimed at offsetting the centripetal forces unleashed by liberalisation. Focusing on Sweden, the paper finds no signs that FDI has contributed to reducing income and development gaps in this country. More specifically, remote provinces that qualify for EU regional support - including support for FDI - have not performed better in terms of employment, labour productivity, and education levels than remote provinces that do not qualify for such support. An exception concerns the R&D intensity of firms (both foreign and indigenous), which tends to be higher in supported than unsupported remote regions.

Suggested Citation

  • Ari Kokko & Patrik Gustavsson, 2004. "Regional integration, foreign direct investment, and regional development," EIB Papers 5/2004, European Investment Bank, Economics Department.
    • Handle: RePEc:ris:eibpap:2004_005
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    References listed on IDEAS

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    Cited by:

    1. Dorożyński, Tomasz & Dorożyńska, Agnieszka & Urbaniak, Wojciech, 2014. "The role of local government units in attracting FDI: The case of the Lodz Region," Business and Economic Horizons (BEH), Prague Development Center (PRADEC), vol. 10(4), pages 1-24.
    2. Tomasz Dorozynski & Agnieszka Dorozynska & Wojciech Urbaniak, 2014. "The role of local government units in attracting FDI. The case of the Lodz Region," Business and Economic Horizons (BEH), Prague Development Center, vol. 10(4), pages 281-304, November.
    3. Rammal, Hussain Gulzar & Zurbruegg, Ralf, 2006. "The impact of regulatory quality on intra-foreign direct investment flows in the ASEAN markets," International Business Review, Elsevier, vol. 15(4), pages 401-414, August.
    4. Tomasz Dorozynski & Agnieszka Dorozynska & Wojciech Urbaniak, 2015. "The role of local government units in attracting FDI. The case of the Lodz Region," Business and Economic Horizons (BEH), Prague Development Center, vol. 10(4), pages 281-304, January.
    5. Kavvadia, Helen, 2012. "Towards Europe 2020 out of the economic crisis: is the Project Bond Initiative a means to financial stability and integration?," MPRA Paper 53696, University Library of Munich, Germany.
    6. Kavvadia, Helen, 2009. "European Integration and the Peripheral Disparities in Greece. The way ahead," MPRA Paper 38356, University Library of Munich, Germany.
    7. Agnieszka Dorozynska & Tomasz Dorozynski, 2015. "Human Capital and FDI in Central and Eastern Europe," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 13(2 (Summer), pages 151-170.

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    More about this item

    Keywords

    Regional development; EU integration; Foreign direct investment;
    All these keywords.

    JEL classification:

    • 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
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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