Spatial clustering and nonlinearities in the location of multinational firms

Roberto Basile (), Luigi Benfratello () and Davide Castellani

No 90/2011, Quaderni del Dipartimento di Economia, Finanza e Statistica from Università di Perugia, Dipartimento Economia

Abstract: We propose a semiparametric geoadditive negative binomial model of industrial location which allows to simultaneously address some important methodological issues, such as spatial clustering and nonlinearities, which have been only partly addressed in previous studies. We apply this model to analyze location determinants of inward greenfield investments occurred over the 2003-2007 period in 249 European regions. The inclusion of a geoadditive component (a smooth spatial trend surface) allows to control for omitted variables which induce spatial clustering, and suggests that such unobserved factors may be related to regional policies towards foreign investors Allowing for nonlinearities reveals, in line with theoretical predictions, that the positive effect of agglomeration economies fades as the density of economic activities reaches some limit value.

Keywords: industrial location; negative binomial models; geoadditive models; european union. (search for similar items in EconPapers)
JEL-codes: C14 C21 F14 F23 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2011-05-02
New Economics Papers: this item is included in nep-cse, nep-eur, nep-geo, nep-int and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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