Host Country Characteristics and Agglomeration in Foreign Direct Investment
Applied Economics, Vol. 28(7), pp. 833-40, 1996
16 Pages Posted: 29 Sep 2020
Date Written: October 4, 1995
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: Suggested Citation