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Evidence on the Determinants of Foreign Direct Investment. The Case of Three European Regions

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  • Lionel Artige
  • Rosella Nicolini

Abstract

This study aims at analyzing the determinants of foreign direct investment inflows for a group of European regions. The originality of this approach lies in the use of disaggregated regional data. First, we develop a qualitative description of our database and discuss the importance of the macroeconomic determinants in attracting FDI. Then, we provide an econometric exercise to identify the potential determinants of FDI inflows. In spite of choosing regions presenting economic similarities, we show that regional FDI inflows rely on a combination of factors that differs from one region to another.

Suggested Citation

  • Lionel Artige & Rosella Nicolini, 2006. "Evidence on the Determinants of Foreign Direct Investment. The Case of Three European Regions," CREPP Working Papers 0607, Centre de Recherche en Economie Publique et de la Population (CREPP) (Research Center on Public and Population Economics) HEC-Management School, University of Liège.
    • Handle: RePEc:rpp:wpaper:0607
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    2. Rao, R. Kavita & Sengupta, D.P., 2014. "Action Plan on Base Erosion and Profit Shifting: An Indian Perspective," Working Papers 14/133, National Institute of Public Finance and Policy.
    3. Amar Iqbal Anwar & Mazhar Y Mughal, 2015. "Determinants of Russian Firms' Merger and Acquisition Activities," Economics Bulletin, AccessEcon, vol. 35(4), pages 2382-2394.
    4. Cantner, Uwe & Günther, Jutta & Hassan, Sohaib Shahzad & Jindra, Björn, 2013. "Outward FDI from the Central and Eastern European Transition Economies – A Discrete Choice Analysis of Location Choice within the European Union," MPRA Paper 51817, University Library of Munich, Germany, revised 04 Jun 2013.
    5. Bouchoucha, Najeh & Yahyaoui, Ismahen, 2019. "Governance and Foreign Direct Investment : A comparative Analysis between Low and Middle Income African Countries," MPRA Paper 95944, University Library of Munich, Germany.
    6. Adelheid Holl & Rafael Pardo & Ruth Rama, 2011. "Comparing Outsourcing Patterns in Domestic and FDI Manufacturing Plants: Empirical Evidence from Spain," European Planning Studies, Taylor & Francis Journals, vol. 20(8), pages 1335-1357, March.
    7. Vittorio, Daniele & Ugo, Marani, 2008. "Organized Crime and Foreign Direct Investment: the Italian Case," MPRA Paper 7217, University Library of Munich, Germany.
    8. Samandar Ali Eshtehardi, Mojgan & Bagheri, Seyed Kamran & Di Minin, Alberto, 2017. "Regional innovative behavior: Evidence from Iran," Technological Forecasting and Social Change, Elsevier, vol. 122(C), pages 128-138.
    9. Marc Audi & Amjad Ali & Yannick Roussel, 2021. "Aggregate and Disaggregate Natural Resources Agglomeration and Foreign Direct Investment in France," International Journal of Economics and Financial Issues, Econjournals, vol. 11(1), pages 147-156.
    10. Liew, Siew-Ling, 2016. "Determinants of Foreign Direct Investment," MPRA Paper 70447, University Library of Munich, Germany.
    11. PIRLOGEANU Dan, 2017. "The Determinants Of Foreign Direct Investments Flows In Brics," Revista Economica, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 69(2), pages 138-145, August.
    12. Endriukaitienė Janina & Linkevičiūtė Vilma & Makutėnas Valdemaras & Paliulienė Lina, 2022. "European Union Investment in the Baltic States: Comparative Analysis," Management Theory and Studies for Rural Business and Infrastructure Development, Sciendo, vol. 44(1), pages 1-12, March.
    13. Avom Désiré & Melingui bate Adalbert Abraham Ghislain, 2020. "The effect of information and communication technologies on foreign direct investments attractiveness in Africa," Economics Bulletin, AccessEcon, vol. 40(3), pages 2304-2319.
    14. Jung Sik Kim & Yonghyup Oh, 2007. "Determinants of Intra-FDI Inflows in East Asia : Does Regional Economic Integration Affect Intra-FDI?," Trade Working Papers 21906, East Asian Bureau of Economic Research.
    15. Nazarczuk, Jarosław M. & Umiński, Stanisław, 2019. "Foreign Trade in Special Economic Zones in Poland," EconStor Books, ZBW - Leibniz Information Centre for Economics, number 204302, December.
    16. Akhil SHARMA & Abdul RISHAD, 2020. "Do the macroeconomic indicators influence foreign direct investment inflow? Evidence from India," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(1(622), S), pages 57-74, Spring.
    17. Daniele, Vittorio & Marani, Ugo, 2011. "Organized crime, the quality of local institutions and FDI in Italy: A panel data analysis," European Journal of Political Economy, Elsevier, vol. 27(1), pages 132-142, March.
    18. Anwar, Amar Iqbal & Hasse, Rolf & Rabbi, Fazli, 2008. "Location Determinants of Indian Outward Foreign Direct Investment: How Multinationals Choose their Investment Destinations?," MPRA Paper 47397, University Library of Munich, Germany.
    19. PIRLOGEANU Dan, 2017. "The Determinants Of Foreign Direct Investments Inflows In G7 Countries," Revista Economica, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 69(3), pages 85-93, August.
    20. Sharvesh Digumber & Hemavadi Soondram & Bhavish Jugurnath, 2017. "Tax Policy and Foreign Direct Investment: Empirical Evidence from Mauritius," International Business Research, Canadian Center of Science and Education, vol. 10(3), pages 42-56, March.
    21. Mariana SEHLEANU, 2017. "Empirical Study Regarding The Factors That Influence Foreign Participation In The Share Capital Of Companies From North-West Region Of Romania," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 143-152, December.
    22. Cantner, Uwe & Günther, Jutta & Hassan, Sohaib Shahzad & Jindra, Björn, 2013. "Outward FDI from Central and East European Transition Economies – A discrete choice analysis of location within the EU," MPRA Paper 51804, University Library of Munich, Germany, revised 12 Aug 2013.

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    More about this item

    Keywords

    Foreign Direct Investment; Productivity; Regions.;
    All these keywords.

    JEL classification:

    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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