The Attraction of Foreign Manufacturing Investments: Investment Promotion and Agglomeration Economies

Keith Head, John Ries () and Deborah Swenson ()

No 4878, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study Japanese investments between 1980 and 1992 to assess the effectiveness of state promotion efforts in light of strong agglomeration economies in Japanese investment. Two policy variables are consistently shown to influence the location of investment - foreign trade zones and labor subsidies. We use simulations to explore the impact these policies had on the geographic distribution of Japanese investment. The simulations reveal that in aggregate promotion programs largely offset each other; however, unilateral withdrawal of promotion causes individual states to lose substantial amounts of foreign investment.

JEL-codes: F21 (search for similar items in EconPapers)
Date: 1994-10
Note: ITI
References: View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Published as Head, Keith, John Ries and Deborah Swenson. "Agglomeration Benefits And Location Choice: Evidence From Japanese Manufacturing Investments In The United States," Journal of International Economics, 1995, v38(3/4,May), 223-247.

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