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Regional integration, foreign direct investment, and regional development

Author

Listed:
  • Kokko, Ari

    () (Stockholm School of Economics)

  • Gustavsson, Patrik

    () (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

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

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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. 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.
    2. 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.
    3. 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.

    More about this item

    Keywords

    Regional development; EU integration; Foreign direct investment;

    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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