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local industrial systems and the location of FDI in Italy

Lisa De Propris, Nigel Driffield () and Stefano Menghinello

International Journal of the Economics of Business, 2005, vol. 12, issue 1, 105-121

Abstract: This article investigates the determinants of foreign direct investment (FDI) location across Italian provinces. Specifically it examines the relationship between industry-specific local industrial systems and the location of inward FDI. This extends previous analysis beyond the mere density of activity, to illustrate the importance of the specific nature of agglomerations in attracting inward investment. The article develops a model of FDI location choice using a unique FDI database stratified by industry and province. The results also suggest that the importance of agglomeration differs between industries, and offers some explanation for this.

Keywords: Local Industrial Systems; Knowledge Sourcing; Agglomeration; Count Data Econometrics; JEL classification: F23; R12 (search for similar items in EconPapers)
Date: 2005
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DOI: 10.1080/1357151042000323085

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