S19-S1 Foreign Investment, Multinationals and Regional Development
Tracks
Special Sessions
Wednesday, August 30, 2017 |
2:00 PM - 3:30 PM |
HC 1313.0309 |
Details
Conveners: Riccardo Crescenzi, Nicola Cortinovis, Frank van Oort / Chair: Jacopo Canello
Speaker
Dr. Timothy Slaper
Manager/Director (prof.)
Indiana University
Competitive advantage, industry clusters and the magnetic attraction of investment in new plant and equipment from outside the region
Author(s) - Presenters are indicated with (p)
Timothy Slaper (p), Ping “Claire” Zheng
Discussant for this paper
Jacopo Canello
Abstract
While the literature on agglomeration externalities has emphasized the competitive and productivity benefits associated with the concentration and co-location of related industries – i.e., industry clusters – the US-based research is sparse on whether regions with specialized industry clusters magnetically attract investment from firms outside the region. Agglomeration externalities create benefits for related industries to co-locate, but to what degree do these externalities attract similar or complementary industries?
In this paper, we address whether, and to what degree, agglomeration externalities magnetically attract new operations and employment into a region. Using greenfield foreign direct investment data at the U.S. county level, we conclude that firms are more likely to invest in new or expanded facilities in regions that have a high absolute concentration of employment in their specific industry. Whether this magnetic attraction occurs for complementary industries within an industry cluster, the data suggest that there is a difference between high-tech and not high-tech industries.
We also find that that several regional characteristics that are considered important by site selectors – those informing the FDI location decisions – are more salient than other regional characteristics and attributes, for example, the availability of labor. We also find that certain state-level characteristics are also positively associated with greenfield FDI flows, such as lower electricity costs and good state governance. These results are largely similar and robust across statistical methods – OLS, logit, negative binomial and pseudo-panel – as well as dependent variables.
In this paper, we address whether, and to what degree, agglomeration externalities magnetically attract new operations and employment into a region. Using greenfield foreign direct investment data at the U.S. county level, we conclude that firms are more likely to invest in new or expanded facilities in regions that have a high absolute concentration of employment in their specific industry. Whether this magnetic attraction occurs for complementary industries within an industry cluster, the data suggest that there is a difference between high-tech and not high-tech industries.
We also find that that several regional characteristics that are considered important by site selectors – those informing the FDI location decisions – are more salient than other regional characteristics and attributes, for example, the availability of labor. We also find that certain state-level characteristics are also positively associated with greenfield FDI flows, such as lower electricity costs and good state governance. These results are largely similar and robust across statistical methods – OLS, logit, negative binomial and pseudo-panel – as well as dependent variables.
Dr. Roberto Ganau
Assistant Professor
University of Padova
Dr. Jacopo Canello
Assistant Professor
University Of Parma
Offshore outsourcing and backshoring patterns in the Italian manufacturing sector: the role of learning and local spillovers
Author(s) - Presenters are indicated with (p)
Jacopo Canello (p), Paolo Pavone
Discussant for this paper
Roberto Ganau
Abstract
See extended abstract