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FDI location across British regions and inward investment policy

Jones, Jonathan and Wren, Colin (2008) FDI location across British regions and inward investment policy. SERC Discussion Papers, SERCDP0013. Spatial Economics Research Centre (SERC), London School of Economics and Political Science, London, UK.

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Abstract

The theory and empirical evidence on FDI location emphasise agglomeration economies over classical location factors, such as grants. This paper uses panel data to analyse the effect of the main instrument of inward investment policy, the UK regional policy grants, on the distribution of FDI projects across British regions over 1985-05. Using a GMM estimator the paper finds grants have a significant effect on FDI, even when agglomeration terms are included, but that its effect diminished over the 1990s. This is attributed to a redrawing of the eligible areas map. It concludes that in relation to foreign investment regional policy is no longer able to affect the regional distribution of FDI, so the grants are an instrument of national development policy.

Item Type: Monograph (Discussion Paper)
Official URL: http://www.spatialeconomics.ac.uk/SERC/publication...
Additional Information: © 2008 Jonathan Jones and Colin Wren
Library of Congress subject classification: H Social Sciences > HG Finance
J Political Science > JA Political science (General)
Sets: Research centres and groups > Spatial Economics Research Centre
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: SERCDP0013
Date Deposited: 24 Mar 2011 10:25
URL: http://eprints.lse.ac.uk/33204/

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