Location of Foreign Direct Investment in Services: Some Cross-industrial Evidence from Sweden
(English)Article in journal (Other academic) Accepted
This study investigates the location of foreign direct investments in Sweden over the period 2002-2009. FDI are measured through the frequency of foreign ventures, i.e. new operating facilities established through Greenfield investments, per region and industrial sector. The aim is to provide cross-industrial evidence to bear on the question whether there is a need to reconsider factors traditionally used to explain FDI location: market potentials, agglomeration economies, transport infrastructure, and factor costs. Negative binomial regression results indicate significant differences across industries in what determines FDI location. The overall model result is that regions with a relatively diverse economy, good access to international airport and a qualified labour force appear to be the most attractive destinations. Diversity, which relates to Jacobs externalities and may stem from urbanisation economies, seems to be the only factor efficient to explain FDI in both manufacturing and service industries. This emphasises the crucial importance of information and knowledge spillovers in the current era of globalisation.
Foreign direct investment, Firm location, Service industries, Regional Economics, Sweden
IdentifiersURN: urn:nbn:se:kth:diva-125902OAI: oai:DiVA.org:kth-125902DiVA: diva2:641302
QS 20132013-08-162013-08-162013-08-16Bibliographically approved