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The regional location of foreign direct investments: a review of the evidence

Author

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  • Raluca Georgiana POPESCU

    (THE ACADEMY OF ECONOMIC STUDIES - Bucharest)

Abstract

The question where to locate a company at regional level remains a very challenging issue because the regional attractiveness patterns for investments are very complex and dynamic. The paper gathers and analyses several studies that use quantitative methods to describe the mechanism of the regional location of foreign companies. The focus is on the nested logit models that identify the highest probability of a location for being chosen from several groups of alternatives according to a set of determinants of various types. By resuming studies on different countries, periods of time and factors of local attractiveness, we can conclude the efficiency of this type of quantitative methods in describing the grounds of choosing the geographical area for implantation. Nevertheless, the most important contribution of the paper is synthesizing the regional determinants of the location of FDI and the efficiency of regional policies.

Suggested Citation

  • Raluca Georgiana POPESCU, 2012. "The regional location of foreign direct investments: a review of the evidence," Anale. Seria Stiinte Economice. Timisoara, Faculty of Economics, Tibiscus University in Timisoara, vol. 0, pages 755-762, May.
    • Handle: RePEc:tdt:annals:v:xviii:y:2012:p:755-762
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    File URL: http://fse.tibiscus.ro/anale/Lucrari2012/kssue2012_124.pdf
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    References listed on IDEAS

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    2. Keith Head & Thierry Mayer, 2004. "Market Potential and the Location of Japanese Firms in the European Union," Post-Print hal-00267438, HAL.
    3. Head, Keith & Ries, John & Swenson, Deborah, 1995. "Agglomeration benefits and location choice: Evidence from Japanese manufacturing investments in the United States," Journal of International Economics, Elsevier, vol. 38(3-4), pages 223-247, May.
    4. Brian J. Aitken & Ann E. Harrison, 2022. "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 6, pages 139-152, World Scientific Publishing Co. Pte. Ltd..
    5. Salvador Barrios & Holger Görg & Eric Strobl, 2006. "Multinationals' Location Choice, Agglomeration Economies, and Public Incentives," International Regional Science Review, , vol. 29(1), pages 81-107, January.
    6. Disdier, Anne-Celia & Mayer, Thierry, 2004. "How different is Eastern Europe? Structure and determinants of location choices by French firms in Eastern and Western Europe," Journal of Comparative Economics, Elsevier, vol. 32(2), pages 280-296, June.
    7. repec:hal:spmain:info:hdl:2441/10192 is not listed on IDEAS
    8. Keith Head & Thierry Mayer, 2004. "Market Potential and the Location of Japanese Investment in the European Union," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 959-972, November.
    9. Hansen, Eric R., 1987. "Industrial location choice in Sao Paulo, Brazil : A nested logit model," Regional Science and Urban Economics, Elsevier, vol. 17(1), pages 89-108, February.
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    11. Head, C. Keith & Ries, John C. & Swenson, Deborah L., 1999. "Attracting foreign manufacturing: Investment promotion and agglomeration," Regional Science and Urban Economics, Elsevier, vol. 29(2), pages 197-218, March.
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    Cited by:

    1. Nalin Kumar Ramaul & Pinki Ramaul, 2018. "Regional Incentives and Location Choice of New Firms in India: A Nested Logit Model," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 16(2), pages 501-525, June.

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    More about this item

    Keywords

    investments; regional investment determinants; location choice;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F2 - International Economics - - International Factor Movements and International Business
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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