Location of Foreign Direct Investment in Services: Some Cross-industrial Evidence from Sweden

Simon Falck ()

Revue d'économie régionale et urbaine, 2014, vol. septembre, issue 2, 285-314

Abstract: This study examines the location of foreign direct investments (FDI) in Sweden over the period 2002-2009. FDI are measured by the frequency of foreign ventures per region and industry, and reflects new operating facilities established through Greenfield investments. The objective is to provide cross-industrial evidence to bear on the question whether there is a need to reconsider factors traditionally used to explain FDI location: market potentials, agglomeration economies, transport infrastructure, and factor costs. Overall, negative binomial regression results indicate that regions with a relatively diverse economy, good access to international airport and a qualified labour force are the most attractive destinations. Agglomeration economies in the form of JACOBS externalities, seem to be the only factor efficient to explain FDI in both manufacturing and service industries. This emphasises the importance of information and knowledge spillovers in the current era of globalisation.

Keywords: FDI; Firm location; Service industries; Regional Economics; Sweden (search for similar items in EconPapers)
Date: 2014
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