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The geographical indication (GI) scheme of the European Union guarantees visibility and protection to high‐quality agri‐food products associated with a demarcated region of origin. This paper estimates the impact of the scheme in attracting agri‐food foreign direct investment (FDI) in European NUTS3 regions, using a novel dataset and a generalized propensity score matching approach. Areas endorsed with GIs attract more FDI in agri‐food‐related activities than their non‐GI counterparts. Positive effects, estimated for FDI inflows, related job creation and inter‐sectoral spillovers on local employment, involves territories with lower institutional quality. [ABSTRACT FROM AUTHOR]

Considering that public debt is a priority for policymakers in Mexico, the aim of this paper is to examine the convergence or divergence in debt per capita and main drivers of debt in the 32 Mexican states in the period 2006–2021. The results support significant spatial correlation of debt/cap across states. Cross‐section and spatial dynamic regressions are used to analyse absolute and conditional beta‐convergence in debt per capita, and the divergence assumption is documented. The panel data models based on the method‐of‐moments quantile models and pooled mean group estimators indicate that poverty is the main determinant of debt, whereas foreign direct investment is insufficient to support the reduction in debt in the long run. These results provide evidence for a set of policy recommendations to ensure a sustainable debt path in Mexico. [ABSTRACT FROM AUTHOR]

This paper investigates Samuelson's [Samuelson, P. A. 'Where Ricardo and Mill Rebut and Confirm Arguments of Mainstream Economists Supporting Globalization.' Journal of Economic Perspectives, 18(3), 2004, 135-46] argument that technical progress of the trade partner may hurt the home country. We illustrate this prospect in a simple Ricardian model for situations with outward knowledge spillovers. Within this framework Samuelson's Act II effects may occur. Based on industry level panel data for 17 OECD countries for the period 1973-2000 we show econometrically that the outflow of domestic knowledge via exports or foreign direct investment (FDI) to the rest of the world may have a negative impact on industry output in the home country. This is particularly so when exporting to technologically less advanced countries and, more specifically, China. ( JEL F10, F11, F14, O30) [ABSTRACT FROM AUTHOR]

Logistics firms play a crucial role in overcoming time and distance constraints in supply chain management. However, little is known about their location patterns. This paper fills the gap by studying the logistics of multi‐national enterprises' location choices across 380 NUTS 3. Using data on 1777 foreign direct investments (FDIs), our findings reveal that forward linkages with a region's retail and wholesale industry exert a stronger impact than intermediate production demand. Results are robust to the inclusion of standard FDIs' determinants and to controls for spatial dependence. Findings suggest that intersectoral demand from downstream sectors positively affect logistics operators independently from the manufacturing base. [ABSTRACT FROM AUTHOR]

This paper studies the joint dynamics of foreign direct investments (FDI) and output growth in European regions by using spatially augmented systems of equations modeling framework that incorporates third‐region and spillover effects. The joint framework is used to study the dynamic impacts of regional human capital endowments, which demonstrates the importance of explicitly accounting for an endogenous relationship. The relationship is highlighted in a stylized projection exercise, where the long‐run impacts are pronounced in Eastern Europe and capital cities. Overall, ignoring the relationship of regional economic performance and FDI distorts the implied transmission mechanism, which is of utmost importance for policy makers. [ABSTRACT FROM AUTHOR]

This paper examines the preferences of a foreign firm and a host country government over two modes of FDI in two‐sided markets: de novo entry (through the establishment of a new platform) and acquisition of the domestic incumbent platform. Technology transfer, cross‐side network externalities and platform service differentiation determine the ranking of the host country welfare gains and the entrant's profits under the two entry modes. In the case where the foreign entrant and the host government disagree over the entry modes ranking, asymmetric foreign equity restrictions can induce the welfare‐optimal choice of the entry mode by the foreign firm. [ABSTRACT FROM AUTHOR]

The 1974 trade act substantially increased the executive branch's authority in trade negotiations through the granting of fast‐track and Section 301 authority. This paper evaluates the effect on U.S. voting behavior resulting from trade with Japan over 1976–1992 time period. To capture U.S. trade exposures to Japan, we develop the Bartik index from Autor et al. (2013) for import competition with Japan and show that local exposure to import competition had statistically significant negative impacts on Republican presidential candidates over the 1976–1984 period. Although the second Reagan administration used Section 301 to open Japan's markets and Japanese firms shifted production to the United States, job‐creation effects of exports and foreign direct investment did not have any influence on voting outcomes. [ABSTRACT FROM AUTHOR]

This study investigates determinants of science and technology parks (STPs) performance in China. We estimate dynamic panel‐data models on a sample comprising 53 STPs for 2008–2018. Foreign direct investment and human capital impact labour productivity and innovation of STPs and explain differences in performance among them. We find evidence for beta‐ and sigma‐convergence of labour productivity and beta‐, but not sigma‐convergence of innovation. Our study provides novel insights for research on STPs and innovation policy regarding heterogeneity in performance of STPs, and specifically, some evidence concerning formation of "clubs" of STPs based on the city‐tier system in China. [ABSTRACT FROM AUTHOR]

This paper investigates the within‐country location choices of a large sample of foreign and domestic firms in 19 Sub‐Saharan African countries. We show that foreign firms are more likely to locate in core regions compared to domestic ones but generate significantly more jobs per productive unit in the periphery. We find some evidence that foreign firms generate relatively better jobs in peripheral areas: more skill intensive and better paid. These results highlight a fundamental role that FDI in peripheral areas might play in rebalancing the spatial distribution of economic opportunities in developing countries where highly congested megacities exercise a strong centripetal force. [ABSTRACT FROM AUTHOR]

Abstract: This paper looks at the results of the referendum on the United Kingdom membership to the European Union in order to test the link between the internationalization of the local economy and the openness of the local society as factors associated with the Leave vote (Brexit). The paper compares a number of alternative explanations put forward in the public debate after the referendum. The empirical analysis suggests that the outcome of the referendum can be linked to an increasing tension between the ever increasing internationalization of local firms and the ‘localistic’ attitude of their employees. Brexit can be seen as the result of a process of ‘split Europeanization’ whereby Euroscepticism is triggered by the increasing mismatch between internationalized economies (and corporate economic interests) and localistic societies (and workers’ attitudes and cultural preferences). [ABSTRACT FROM AUTHOR]

Abstract: Leaving the EU will reshape the UK's economic relations with the rest of the world. This paper summarizes the findings of recent research studying the UK's role in the global economy, and the consequences of Brexit for UK trade, investment, and living standards. We emphasize that international integration affects investment and labour flows as well as trade in goods and services. There are important interdependencies between different forms of integration that should be accounted for when evaluating policy changes. Brexit is likely to make the UK poorer by reducing trade and investment flows, but the magnitude of the economic decline will depend upon the nature of the UK's post‐Brexit economic relations with the EU and the rest of the world. We conclude by considering options for UK‐EU relations after Brexit and how the UK should approach future trade negotiations. [ABSTRACT FROM AUTHOR]

Inward foreign direct investment (FDI) has generally been linked to higher wages, but evidence remains sparse on the overall effects of FDI on average wages, the wage gap between skilled and unskilled labour, and inter‐industry heterogeneity. We address these issues for Mexican municipalities and industries for a period of increasing FDI and sectoral change that saw growing wage inequality. By combining two non‐experimental techniques we find that FDI in Mexico was associated with higher wages, mostly for skilled workers—but also for unskilled ones—and a widening gap between them. Effects vary both between and within industries depending on location, and they either wax or wane when the initial or incremental effects are considered. [ABSTRACT FROM AUTHOR]

Using 2012 and 2016 input–output tables, the paper aims to assess the dispersion effects of bank credit on value added created by exporting activities of 17 sectors from Vietnam to Association of South East Asian Nations (ASEAN) countries. The research contributes to the literature with respect to the role of the banks on providing credit to export in developing countries. Despite the increasing demand for export credit to ASEAN countries in the period of 2013–2017, Vietnamese export credit only accounted for roughly 30% of total credit. The research results indicate that capital requirements for exporting are always higher than other activities and keep growing during the recent period. It shows the importance of bank loans for exporting activities in Vietnam. Moreover, according to the research, exports to ASEAN countries have greater dispersion impact than exporting to other countries, and capital requirements for exporting to ASEAN countries are also higher. This implies bank credit for exporting activities to ASEAN countries should be encouraged. As a result of empirical evidence regarding the power of dispersion and level of value added induced by the increase of final demand, the study recommends that Vietnam should pay more attention to potential target countries like Laos, Malaysia, and Thailand, as well as prioritize some business sectors related to agriculture and services for funding. [ABSTRACT FROM AUTHOR]

There is no overall agreement on the relationship between foreign direct investment (FDI) and domestic enterprise, this may reflect different effects from various types of FDI. A panel data regression approach is adopted to examine the impact of knowledge intensive FDI on both new firm formation and the deaths of enterprises. Jobs created by FDI are found to not influence firm births, but influence domestic enterprise through deaths. Renewal knowledge intensive activities reduce firm deaths, but routine or compliance knowledge intensive activities increase the death rate. This means policy seeking to attract FDI must distinguish even within different types of knowledge intensive activities. [ABSTRACT FROM AUTHOR]

This paper investigates the effect of foreign direct investment on the productivity of local manufacturing firms in Romania. We decompose traditional country-wide spillover measures in different components according to both proximity between foreign and domestic firms and time-since-foreign-entry. We find larger and faster spillover effects for local suppliers of foreign firms at shorter distance, driven mainly by recent foreign entrants. Irrespective of distance, foreign firms of medium maturity generate backward spillover effects that fade away with longer presence. A positive effect on local competitors is not significantly affected by distance, but requires the presence of mature foreign firms. [ABSTRACT FROM AUTHOR]

This paper examines how market-access strategies, via exports and FDI, respond to changes in the level of integration. Empirical evidence shows that both firm exports and multinational activity are affected by trade liberalization episodes. We account for the strong positive correlation between exports and FDI by developing a general-equilibrium model featuring firm heterogeneity, trade and FDI with final and intermediate products. Different geographical spaces are considered to quantify the effect of a preferential trade agreement ( PTA) on supply-mode decisions, for both partner and excluded countries. The model sheds new light on the mechanisms through which geography reshapes the concentration of economic activities both inside and outside the PTA area. [ABSTRACT FROM AUTHOR]

This paper describes the Remi-Irpet macroeconometric multisectoral model. The Remi-Irpet, based on an input-output core structure, has its most distinctive feature in the modelling of vertical pecuniary externalities à la Fujita-Krugman-Venables which represents the core dynamization mechanism. Our contribution first presents the theoretical background of the model. Second, we present a simulation exercise performed through the model in which we evaluate the structural impact of incoming FDIs for Tuscany. The impact analysis is defined in terms of (i) change in the overall productive capacity and (ii) medium-term changes in prices and productivity, driven by the changes in the accessibility to labour and intermediate inputs. [ABSTRACT FROM AUTHOR]

Using a dynamic panel data spatial Durbin model, this paper aims to examine FDI spillover and impacts on urban productivity in the Yangtze River Delta ( YRD) and the Pearl River Delta ( PRD). We find that FDI has positive impacts on local city's productivity but its spatial spillovers behave differently in the YRD and PRD. Spatial interactions cannot be neglected in urban growth; yet YRD and PRD demonstrates significant but opposite spatial growth effects. FDI accelerates the economic growth convergence in the YRD while slows down convergence in the PRD. Positive spatial spillover of productivity occurs in the YRD while negative spatial spillover occurs in the PRD. The results point to important policy implications for the two regions to attract FDI and promote urban development. [ABSTRACT FROM AUTHOR]

In offshore sourcing, a firm chooses outsourcing to independent suppliers or in-sourcing from own foreign direct investment (FDI) subsidiaries. Based on the firm-level data on offshore make-or-buy decision covering all manufacturing industries, this paper compares averages, documents inter-firm distributions, and estimates multinomial logit models of the firm's sourcing mode choice. As predicted by previous theoretical models, this paper directly confirms at the firm level that outsourcing firms tend to be substantially labor-intensive compared with firms in-sourcing from the same region, even after the firm's R&D intensity, firm size, or industry is controlled for. ( JEL F23, L23, L24, L14) [ABSTRACT FROM AUTHOR]

This paper aims to establish whether geographical proximity between multinational and domestic firms is relevant to the occurrence of FDI spillovers, by considering both horizontal and vertical spillovers. Using data for Portugal, this hypothesis is confirmed. In the case of horizontal externalities, the impact is negative, probably due to the competition effect. Concerning vertical externalities, a positive impact through backward linkages is observed. Additionally, omission of the regional dimension provokes a bias on the estimation of the intra-sectoral effect at the national level. These results raise important implications for the economic policies aiming to attract FDI and promote regional development. [ABSTRACT FROM AUTHOR]

This paper exploits an international bilateral data set over the period 1963-1998 to investigate the relationship between foreign direct investment (FDI) and foreign-educated labor in an FDI host country. Workers educated abroad acquire country-specific human capital that is more productive in the host country of study. A foreign subsidiary sharing a parent firm's technology will invest more if it has more foreign-educated labor, since it can utilize this labor more productively because of the country-specific human capital. Consistent with our predictions, our empirical findings show that foreign-educated labor accounted for a sizable portion of growth in FDI flows. [ABSTRACT FROM AUTHOR]

This paper investigates whether or not floating exchange rates add an undesirable level of risk to international investment positions. For investors holding currencies, we find that fixed exchange rates are preferred to floating exchange rates, which supports the often-argued case that floating exchange rates do excessively increase the riskiness of investment. However, in the more realistic case of investors holding foreign securities, we find that floating exchange rates are preferred to fixed exchange rates; that is, we find that floating exchange rates have not added an undesirable level of risk to international investment positions. [ABSTRACT FROM AUTHOR]

We analyse the determinants of firm entry in developing countries using Argentina as an illustrative case. Our main finding is that although most of the regional determinants used in previous studies analysing developed countries are also relevant here, there is a need for additional explanatory variables that proxy for the specificities of developing economies (e.g., poverty, informal economy and idle capacity). We also find evidence of a core-periphery pattern in the spatial structure of entry that seems to be mostly driven by differences in agglomeration economies. Since regional policies aiming to attract new firms are largely based on evidence from developed countries, our results raise doubts about the usefulness of such policies when applied to developing economies. [ABSTRACT FROM AUTHOR]

In this study we argue that the capacity of regions to attract FDI is affected by the own-country effect, which can take two different forms: the first relates to the relative performance of the country of which the region is part (the between-country effect); the second concerns the relative performance of regions within their own countries (the within-country effect). By using spatial econometrics techniques we demonstrate that the own country effect exists. However, while the within effect is always positive, the between one may be either positive or negative. This means that successful regions in unsuccessful countries generally enjoy an extra- FDI premium, while regions in successful countries do not necessarily do so. [ABSTRACT FROM AUTHOR]

This study examines the role of globalization on industrial performance ( IP) in China. Using the data on 21 manufacturing sectors in six years (2005-2010) for 31 provinces/regions, we construct four IP indicators to estimate how globalization influences China's industrial capacity and technological composition through foreign direct investment ( FDI) and foreign trade. The panel estimating results suggest that both FDI and foreign trade generate strong positive effects on manufacturing output and manufacturing exports, but the contributions to industrial upgrading and technological complexity seem to be limited. At the regional level, the effect of FDI and trade on IP is numerically much smaller in the inland area than in the coastal area. [ABSTRACT FROM AUTHOR]

Using data on 5,102 subsidiaries established in the period 1991–1999, we examine the location choice of multinational firms of different nationalities in 47 regions of five EU countries. In particular we estimate a nested logit model and find that European multinationals consider regions across different countries as relatively closer substitutes than regions within national borders. This is consistent with the hypothesis that European regions compete to attract foreign direct investments relatively more across than within countries. However, in line with previous studies, we also find that national boundaries still play some role in choices made by non-European multinationals. [ABSTRACT FROM AUTHOR]

This article attempts to reconcile previous conflicting findings about the effects of labour cost on the location decisions of foreign investors in China. A conditional logit model is calibrated with its compatible disaggregated firm-level Japanese FDI data. It is hypothesised that previous counter-intuitively positive relationships between labour cost and incoming FDI in China may result from the failures to properly control spatial inflation differentials, labour quality, and quality of life. A Hausman-McFadden test is also conducted to test the robustness of the calibrated models. [ABSTRACT FROM AUTHOR]

The article examines the extent to which foreign manufacturing firms in the UK promote productivity growth in the domestically owned manufacturing sector through their buying and supplying relationships. Evidence for intra- and inter-regional externalities from the presence of foreign manufacturing, and intra- and inter-industry effects is brought to light. Externalities in the domestic sector are most noticeable where foreign manufacturing sells to domestic manufacturing. These externalities are, however, not wholly robust to different specifications of spatial dependence. The findings are positioned in a debate, which has tended to view backward (as opposed to forward) linkages from multinationals to domestically owned supply bases as a critical driver of indirect economic benefits. [ABSTRACT FROM AUTHOR]

Foreign investment by means of equity participation of foreign firms in local firms contributes to local industrial development through transfer of technology and through leveraging capital requirements. During the last two decades the nature of foreign equity participation in firms and the location of FDI in four ASEAN countries (Indonesia, Thailand, Malaysia, and the Philippines, referred to hereafter as the ASEAN-4 countries) has undergone a significant transition. From 1980-1994, the Japanese manufacturing industry was the major foreign industrial investor in the ASEAN-4 countries. The spatial pattern of equity investment and employment generation has been very different among regions in the ASEAN-4 countries. Using the Theil index we estimate disparity in employment generation and equity investment within and between regions of Indonesia, Thailand, Malaysia, and the Philippines in the context of each country's socio-economic geography and economic development characteristics. [ABSTRACT FROM AUTHOR]

This article investigates whether labour market competitiveness affects the inflows of foreign direct investment (FDI) into the ASEAN economies Malaysia, Thailand and the Philippines. The analysis is based on a regression model using time series data on FDI, wages, the labour force, skills, R&D expenditure, the interest rate and several variables critical for economic development. The study shows that the labour market determinants differ between countries in terms of their role in FDI inflows. Thus analysis results suggest that, with regard to labour market competitiveness, different countries may require different policy recommendations in order to attract FDI inflows into their countries. [ABSTRACT FROM AUTHOR]

Using data from China, this article finds that agglomeration economies derived from the clustering of manufacturing and foreign investment activities, combined with better access to markets, influence the location of foreign manufacturers. Foreign enterprises are attracted to cities with investment incentives, but they avoid high labour cost locations. The locational patterns also suggest country of origin effects. American, Hong Kong and Taiwanese manufacturers tend to value access to domestic markets, while Japanese investors favour port cities. Further analysis indicates the presence of origin of country effects at the sectoral level. [ABSTRACT FROM AUTHOR]

Abstract. This article reconsiders the patterns of intra-Asia trade and the linkages with foreign direct investment (FDI) in this region. The following conclusions are drawn. Firstly, by 1985 intra-Asia trade exhibited both distinct patterns of interindustry trade on the one hand, and intra-industry trade on the other. Secondly, the patterns of trade in this region have not changed since 1985 from vertical to horizontal, but from a "flying-geese" to an "acrobatic" type, due to the sharp increase in FDI within the region. Thirdly, since the early 1990s, FDI began to shift to China due to the wage differentials between China and other East Asian countries. This made the countries of East Asia compete with one another, rushing to obtain capital and financial resources from all over the world -- ultimately contributing to recent financial and economic turbulence in the region. The article concludes with some brief policy recommendations on how to avoid a recurrence of the Asian crisis in the 21st century. [ABSTRACT FROM AUTHOR]

Abstract. This research note investigates the determinants of Australia's inward and outward direct foreign investment (DFI) using annual and quarterly data. It is found from pooled annual data for Australia and seven developed countries that DFI has been influenced by labor disputes, current account balances, Australia's real GDP and real exchange rates. The application of an econometric model using quarterly data shows that the long run elasticities of DFI with respect to real exchange rates and labor disputes are significant for selected cases. [ABSTRACT FROM AUTHOR]