Agglomeration in the Geographical Location of Swedish MNFs

In Pontus Braunerhjelm and Karolina Ekholm (eds.): The Geography of Multinational Firms, Boston: Kluwer Academic Publishers, 1998, pp. 99-115.

17 Pages Posted: 17 Aug 2020 Last revised: 19 Aug 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: February 3, 1998

Abstract

In this chapter we have briefly reviewed the recent theoretical advances made regarding the location of production, with emphasis on agglomeration of production across countries. We have confronted the theoretical explanations with the quite scarce empirical evidence on agglomeration in foreign production. Finally, by pooling data on foreign production by Swedish firms and country level data, we have investigated whether any agglomeration patterns could be detected in Swedish foreign production.

The results suggest that patterns of agglomeration do prevail but are limited to the R&D-intensive production. This is in line with explanations of agglomeration presented in much of the spillover literature and also conforms with the results presented in a number of more micro-oriented studies. Agglomeration of knowledge-intensive production that occurs at the country level, may over time show up in altered patterns of specialization across countries. Moreover, such location could also have direct welfare implications by affecting growth rates through the accumulation of knowledge capital. Accordingly, as FDI and foreign production have evolved into a major force in the world economy, its implications for home and host countries also become more apparent.

Keywords: Agglomeration, clustering, Foreign Direct Investment

JEL Classification: F23

Suggested Citation

Braunerhjelm, Pontus and Svensson, Roger, Agglomeration in the Geographical Location of Swedish MNFs (February 3, 1998). In Pontus Braunerhjelm and Karolina Ekholm (eds.): The Geography of Multinational Firms, Boston: Kluwer Academic Publishers, 1998, pp. 99-115., Available at SSRN: https://ssrn.com/abstract=3633021

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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