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Agglomeration and FDI in East German Knowledge-Intensive Business Services

Philipp Marek ()

Economia politica, 2012, issue 3, 343-360

Abstract: The focus of this article is the empirical identification of factors influencing Foreign Direct Investment (FDI) in the knowledge-intensive business service (KIBS) sector on the regional level of «Raumordnungsregionen» in East Germany. The analysis focuses on the impact of regional agglomeration and technological capability on the location decision of foreign investors and West German MNEs. It shows that localisation, patent activity and the share of employees with an R&D occupation affect significantly the location decision of FDI. This result provides an explanation for the strong concentration of KIBS in urban areas in a post-transition economy.

Keywords: J.E.L. F23; L84; R30 (search for similar items in EconPapers)
Date: 2012
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Economia politica is currently edited by Alberto Quadrio Curzio, Giorgio Lunghini, Pier Carlo Nicola

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Handle: RePEc:mul:jb33yl:doi:10.1428/38930:y:2012:i:3:p:343-360