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The dynamics of FDI location: a markov analysis for British regions

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  • Jones, Jonathan
  • Wren, Colin

Abstract

The paper uses the framework of Markov chains to examine convergence in the location of inward foreign direct investment across the regions of Great Britain over 1985-2005. An analysis is undertaken by industry group that disaggregates manufacturing and services. It finds convergence in regional FDI shares, both overall and by industry, which supports agglomeration. As explanations, a weakening of regional policy has led manufacturing FDI to spread-out from ‘north’ to ‘south’, but in services there is a shift in FDI location within the ‘south’ from core to contiguous regions, suggesting diseconomies at the core. The paper finds different spatial processes and draws implications for regional policy.

Suggested Citation

  • Jones, Jonathan & Wren, Colin, 2009. "The dynamics of FDI location: a markov analysis for British regions," LSE Research Online Documents on Economics 33497, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:33497
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    File URL: http://eprints.lse.ac.uk/33497/
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    References listed on IDEAS

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    Cited by:

    1. Colin Wren, 2009. "Onward the Spatial: an Essay on the Nature and Relevance of Regional Economics," Spatial Economic Analysis, Taylor & Francis Journals, vol. 4(4), pages 447-465.

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    • N0 - Economic History - - General

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