 On the drivers of UK direct investment in the Spanish regions: A spatial Durbin approachAdolfo Maza, Paula Gutiérrez‐Portilla and José Villaverde Growth and Change, 2020, vol. 51, issue 2, 646-675 Abstract: This paper empirically examines the key factors driving UK direct investment in the Spanish regions over the period 2000–2016 and, consequently, tries to unveil its main motivation. Applying a spatial Durbin panel model to capture spatial linkages, the results point to the existence of complementarity between the FDI received by a region and that of the remaining ones. This outcome, along with a positive and statistically significant spillover effect of market potential, reveals that complex‐vertical FDI motivation with agglomeration economies prevails among UK MNEs investing in Spain. Additionally, our findings unveil the role played by some other FDI drivers, such as wages and infrastructure. Furthermore, the paper is unique in decomposing the average direct and spillover effects by region and pairs of regions, so that remarkable differences can be identified. This breakdown has strong significance from a policy perspective since it can guide regional policy makers. In short, our findings point out to the fact that FDI policy should be jointly designed by those regions presenting strong bilateral spillover effects. Thus, greater cooperation among policy makers would be welcome. Date: 2020 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:growch:v:51:y:2020:i:2:p:646-675 Ordering information: This journal article can be ordered from Access Statistics for this article Growth and Change is currently edited by Dan Rickman and Barney Warf More articles in Growth and Change from Wiley Blackwell |
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