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Regional Grants And Fdi Location: Evidence From Swedish Regional Policy Programs 2002-2009

Author

Listed:
  • Simon Falck

    (Royal Institute of Technology (KTH))

  • Hans Westlund

    (Royal Institute of Technology (KTH))

Abstract

This study investigates factors determining the location of foreign direct investments (FDI) in Sweden. The main purpose is to examine the link between FDI and public incentives, in the form of regional grants, which make up a central part of the Swedish regional policy and state expenditures that explicitly addresses regional development. Our main finding is that there is no evidence of a robust relationship between grants and the location of FDI. However, a statistically significant effect is found for investment support and transport allowance, which are grants that aims at promoting development in designated areas. This by supporting investments in machines, buildings, and so on, and offset costs disadvantages in the northern parts of the country. We conclude that a better integration between the work on FDI and regional development may be a plausible route to promote economic development in Sweden, particularly in deprived regions.

Suggested Citation

  • Simon Falck & Hans Westlund, 2013. "Regional Grants And Fdi Location: Evidence From Swedish Regional Policy Programs 2002-2009," Romanian Journal of Regional Science, Romanian Regional Science Association, vol. 7(1), pages 36-68, JUNE.
    • Handle: RePEc:rrs:journl:v:7:y:2013:i:1:p:36-68
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    References listed on IDEAS

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    More about this item

    Keywords

    Foreign Direct Investment; Firm location; Public intervention; Sweden;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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