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Regional Foreign Direct Investment in Manufacturing. Do Agglomeration Economies Matter?

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  • Angels Pelegrin
  • Catalina Bolance

Abstract

Pelegrin A. and Bolance C. Regional foreign direct investment in manufacturing. Do agglomeration economies matter?, Regional Studies. This paper examines the role played by agglomeration economies as location determinants of regional foreign direct investment (FDI) in manufacturing. The analysis reveals that FDI location is dependent on specific industry traits and that agglomeration economies appear as the strongest pull factors. The model, estimated with panel data, finds evidence, first, that industries with a high level of linkages are attracted to regions with high manufacturing activity, and, second, that locations which accumulate research and development (R&D) activities attract chemical industries. Finally, cost-oriented industries do not value agglomeration economies and their localization emerges as a result of endowment reasons. [image omitted] Pelegrin A. et Bolance C. L'investissement direct etranger regional dans l'industrie - Les economies d'agglomeration, ont-elles de l'importance? Regional Studies. Cet article cherche a examiner le role que jouent les economies d'agglomeration dans la determination de la localisation de l'investissement direct etranger regional industrielle. L'analyse laisse voir que la localisation de l'investissement direct etranger depend des caracteristiques particulieres de l'industrie et que les economies d'agglomeration s'averent les forces motrices les plus puissantes. Estime a partir des donnees provenant d'une enquete a echantillon constant, le modele indique, primo, que les industries qui jouissent d'importantes liaisons se dirigent vers les regions dont l'activite industrielle est forte et, secundo, que les industries chimiques s'installent dans les zones ou s'agglomerent les activites de R et D. Pour conclure, les industries qui mettent l'accent sur les couts n'evaluent pas les economies d'agglomeration, et leur localisation s'explique par des caracteristiques particulieres. Investissement direct etranger Economies d'agglomeration Localisation de l'industrie regionale Caracteristiques industrielles Donnees par enquete a echantillon constant Pelegrin A. und Bolance C. Regionale auslandische Direktinvestitionen in produzierende Betriebe: Spielen Agglomerationswirtschaften eine Rolle? Regional Studies. In diesem Beitrag wird untersucht, welche Rolle Agglomerationswirtschaften als Standortdeterminanten fur regionale auslandische Direktinvestitionen in produzierende Betriebe spielen. Aus der Analyse geht hervor, dass der Standort fur auslandische Direktinvestitionen von spezifischen Branchenmerkmalen abhangt und dass von Agglomerationswirtschaften die starkste Anziehungskraft auszugehen scheint. Aus diesem Modell, das auf Schatzungen anhand von Paneldaten beruht, gehen Belege hervor, dass erstens hochgradig verknupfte Branchen von Regionen mit ausgepragter Produktionstatigkeit angezogen werden, und dass zweitens Standorte, in denen sich F&E-Aktivitaten konzentrieren, Chemiebetriebe anziehen. Kostenorientierte Branchen schliesslich legen keinen Wert auf Agglomerationswirtschaften; hier richtet sich die Standortwahl nach Aspekten der Ausstattung. Auslandische Direktinvestitionen Agglomerationswirtschaften Regionale Produktionsstandorte Branchenmerkmale Paneldaten Pelegrin A. y Bolance C. Inversion directa extranjera regional en manufacturacion ¿Importan las economias de aglomeracion? Regional Studies. En este articulo examinamos el rol desempenado por las economias de aglomeracion como determinantes de ubicacion de la inversion directa extranjera regional en manufacturacion. El analisis indica que la ubicacion de la inversion directa extranjera depende de particularidades especificas en la industria y que las economias de aglomeracion aparecen como los factores mas solidos de atraccion. Con el modelo, segun una estimacion de datos de panel, se demuestra primero que las industrias con un alto nivel de vinculos se ven atraidos por regiones con una alta actividad de manufacturacion y segundo, que las ubicaciones en las que se acumulan las actividades de I + D atraen a las industrias quimicas. Finalmente, las industrias basadas en el coste no valoran las economias de aglomeracion y su ubicacion depende de la dotacion de la region. Inversion directa extranjera Economias de aglomeracion Ubicacion de manufacturacion regional Particularidades de la industria Datos de panel

Suggested Citation

  • Angels Pelegrin & Catalina Bolance, 2008. "Regional Foreign Direct Investment in Manufacturing. Do Agglomeration Economies Matter?," Regional Studies, Taylor & Francis Journals, vol. 42(4), pages 505-522.
    • Handle: RePEc:taf:regstd:v:42:y:2008:i:4:p:505-522
    DOI: 10.1080/00343400701543157
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    References listed on IDEAS

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    1. Peter J. Buckley & Mark Casson, 1991. "The Future of the Multinational Enterprise," Palgrave Macmillan Books, Palgrave Macmillan, edition 0, number 978-1-349-21204-0, December.
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    Cited by:

    1. Ford, Timothy C. & Rork, Jonathan C., 2010. "Why buy what you can get for free? The effect of foreign direct investment on state patent rates," Journal of Urban Economics, Elsevier, vol. 68(1), pages 72-81, July.
    2. Neil Foster & Robert Stehrer, 2009. "Sectoral Productivity, Density and Agglomeration in the Wider Europe," Spatial Economic Analysis, Taylor & Francis Journals, vol. 4(4), pages 427-446.
    3. Claver-Cortés, Enrique & Marco-Lajara, Bartolome & Manresa-Marhuenda, Encarnación & García-Lillo, F. & Seva-Larrosa, Pedro, 2017. "Location Decisions and Agglomeration Economies: Domestic and Foreign Companies," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 39, pages 99-135.
    4. Basanta K Pradhan & Rashmi Rastogi, 2015. "Mineral Resource Endowments and Investment Destinations: A Panel Data Analysis of Indian States," IEG Working Papers 354, Institute of Economic Growth.
    5. Peter Mayerhofer & Oliver Fritz & Dieter Pennerstorfer, 2010. "Dritter Bericht zur internationalen Wettbewerbsfähigkeit Wiens," WIFO Studies, WIFO, number 42430.
    6. Gary A.S. Cook & Naresh R. Pandit, 2014. "Agglomeration and flows of outward direct investment: an analysis of financial services in the United Kingdom," Chapters, in: Charlie Karlsson & Börje Johansson & Roger R. Stough (ed.), Agglomeration, Clusters and Entrepreneurship, chapter 3, pages 52-65, Edward Elgar Publishing.
    7. Angels Pelegrín & Catalina Bolancé, 2011. "Offshoring and company characteristics: some evidence from the analysis of Spanish firm data," Working Papers 2011/16, Institut d'Economia de Barcelona (IEB).
    8. Gary A.S. Cook & Hans Lööf & Naresh R. Pandit & Börje Johansson, 2012. "The influence of clustering on MNE location and innovation in Great Britain," Chapters, in: Charlie Karlsson & Börje Johansson & Roger R. Stough (ed.), Entrepreneurship, Social Capital and Governance, chapter 3, pages 53-82, Edward Elgar Publishing.
    9. Jonathan Jones, 2017. "Agglomeration economies and the location of foreign direct investment: A meta-analysis," Journal of Regional Science, Wiley Blackwell, vol. 57(5), pages 731-757, November.
    10. Angels Pelegrín & Catalina Bolancé, 2011. "Offshoring and company characteristics: some evidence from the analysis of Spanish firm data," Working Papers 2011/16, Institut d'Economia de Barcelona (IEB).
    11. Àngels Pelegrín Solé & Catalina Bolance Losilla, 2010. "International industry migration and firm characteristics: some evidence from the analysis of firm data," Working Papers 2010/20, Institut d'Economia de Barcelona (IEB).

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    More about this item

    Keywords

    R12; F21; F23;
    All these keywords.

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • 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

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