Attracting Foreign Direct Investments in Europe: are Italian Regions Doomed?

Roberto Basile (), Luigi Benfratello and Davide Castellani

No 200, Development Working Papers from Centro Studi Luca d'Agliano, University of Milano

Abstract: During the nineties, Europe became a major recipient of FDIs but Italian regions have been largely excluded from this process. Was it due to their characteristics, or were Italian regions ‘doomed’ by a negative country effect? In this paper we address this issue by estimating the determinants of multinational firms’ location choices in 52 EU regions. We find that Italian regions indeed attracted significantly less than their observable potential, and that this could be explained by the inefficiency of the bureaucratic apparatus and of the legal system. The effect of taxes is instead strongly sensitive to the inclusion of agglomeration variables and is asymmetric across regions.

Keywords: multinational firms; location choices; Italy; institutions and policies; negative binomial regression (search for similar items in EconPapers)
JEL-codes: C35 F23 O52 (search for similar items in EconPapers)
Date: 2005-06-15
New Economics Papers: this item is included in nep-geo
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Citations: View citations in EconPapers (23)

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Journal Article: Attracting Foreign Direct Investments in Europe: Are Italian Regions Doomed? (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:csl:devewp:200

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