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Do friends follow each other? FDI network effects in Central Europe

Gábor Békés and Marta Bisztray ()

No 1719, IEHAS Discussion Papers from Institute of Economics, Centre for Economic and Regional Studies

Abstract: A great deal of multinationals receive a bundle of hidden or cash subsidizes upon investing in a foreign country. Policymakers often argue that a subsidy today will help locate friends of the investor later on. Using extensive data on FDI investments, we analyze such patterns. In particular, we investigate if co-location is more frequent among connected firms such as members of business groups as well as firms sharing similar background. Focusing on investments into Central and Eastern European countries we find evidence of co-location pattern of connected firms.

Keywords: Foreign direct investment; agglomeration; location choice; network effects; business groups (search for similar items in EconPapers)
JEL-codes: F23 R3 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur, nep-geo, nep-int, nep-sbm, nep-soc and nep-tra
Date: 2017-06
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Persistent link: https://EconPapers.repec.org/RePEc:has:discpr:1719

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