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On the Relative Importance of Agglomeration Economies in the Location of FDI Across British Regions

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  • Jonathan Jones
  • Colin Wren

Abstract

The paper examines the relative importance for industrial location of production linkages and knowledge spillovers, distinguishing between intermediate and non-intermediate goods that are backwards or forwards in nature. A novel approach is used to construct proxies for non-intermediate goods at a sub-national industry level based on an Input-Output transaction table. Taking data on location decisions by foreign-owned plants across British regions over 1985-2007, the paper finds support for the new economic geography explanation of location based on linkages over that due to spillovers. However, the importance of intermediate and non-intermediate linkages differs between manufacturing and service industries.

Suggested Citation

  • Jonathan Jones & Colin Wren, 2011. "On the Relative Importance of Agglomeration Economies in the Location of FDI Across British Regions," SERC Discussion Papers 0089, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:sercdp:0089
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    Cited by:

    1. Colin Wren, 2011. "Geographic Concentration and the Temporal Scope of Agglomeration Economics: An Index Decomposition," SERC Discussion Papers 0094, Centre for Economic Performance, LSE.
    2. Wren, Colin, 2011. "Geographic concentration and the temporal scope of agglomeration economics: an index decomposition," LSE Research Online Documents on Economics 58351, London School of Economics and Political Science, LSE Library.
    3. Wren, Colin, 2012. "Geographic concentration and the temporal scope of agglomeration economies: An index decomposition," Regional Science and Urban Economics, Elsevier, vol. 42(4), pages 681-690.

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    More about this item

    Keywords

    Industrial location; agglomeration economies; intermediate goods; FDI;
    All these keywords.

    JEL classification:

    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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