On the Relative Importance of Agglomeration Economies in the Location of FDI Across British Regions

Jonathan Jones and Colin Wren

SERC Discussion Papers from Centre for Economic Performance, LSE

Abstract: The paper examines the relative importance for industrial location of production linkages and knowledge spillovers, distinguishing between intermediate and non-intermediate goods that are backwards or forwards in nature. A novel approach is used to construct proxies for non-intermediate goods at a sub-national industry level based on an Input-Output transaction table. Taking data on location decisions by foreign-owned plants across British regions over 1985-2007, the paper finds support for the new economic geography explanation of location based on linkages over that due to spillovers. However, the importance of intermediate and non-intermediate linkages differs between manufacturing and service industries.

Keywords: Industrial location; agglomeration economies; intermediate goods; FDI (search for similar items in EconPapers)
JEL-codes: H3 L2 O2 R3 (search for similar items in EconPapers)
Date: 2011-08
New Economics Papers: this item is included in nep-eff, nep-geo and nep-ure
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:cep:sercdp:0089

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