Host Country Characteristics and Agglomeration in Foreign Direct Investment

Applied Economics, Vol. 28(7), pp. 833-40, 1996

16 Pages Posted: 29 Sep 2020

See all articles by Pontus Braunerhjelm

Pontus Braunerhjelm

Royal Institute of Technology (KTH) - Department of Infrastructural and Urban Planning (INFRA); Örebro University - Swedish Entrepreneurship Forum

Roger Svensson

Research Institute of Industrial Economics (IFN)

Date Written: October 4, 1995

Abstract

By combining unique data on Swedish multinationals with industry data for 18 countries, the influence of host country characteristics on the location of foreign production is analysed. Particular attention is directed towards agglomeration tendencies in firms’ location. The sample selection incorporates countries where firms have no affiliate production, which is an extension of previous research in this area. The results suggest that agglomeration effects are present, predominantly in technologically advanced industries. It is also shown that market size, the supply of skilled labour and earlier exports pattern, affect the location of overseas production.

Keywords: agglomeration, foreign production, clustering, exports, host country

JEL Classification: F16, F22, F23

Suggested Citation

Braunerhjelm, Pontus and Svensson, Roger, Host Country Characteristics and Agglomeration in Foreign Direct Investment (October 4, 1995). Applied Economics, Vol. 28(7), pp. 833-40, 1996, Available at SSRN: https://ssrn.com/abstract=3632986 or http://dx.doi.org/10.2139/ssrn.3632986

Pontus Braunerhjelm

Royal Institute of Technology (KTH) - Department of Infrastructural and Urban Planning (INFRA) ( email )

SE-100 44 Stockholm
Sweden
+46 8 790 9114 (Phone)
+46 8 411 7436 (Fax)

Örebro University - Swedish Entrepreneurship Forum ( email )

Södra Kungstornet
Kungsgatan 33, 7tr
Stockholm, 11156
Sweden

Roger Svensson (Contact Author)

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden
+46-8-6654549 (Phone)
+46-8-6654599 (Fax)

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