Abstract
Previous studies have shown that the localisation of firms can be an important factor in attracting new foreign direct investment into a host country. The authors distinguish between "efficiency agglomerations" which arise as firms increase their efficiency by locating close to each other, and "demonstration effects" whereby existing firms send signals to new investors as to the reliability and attractiveness of the host country. They try to disentangle these two effects by examining the location of US firms in Ireland. They find that both sources of agglomerations have been important determinants of US firm entry into Ireland. JEL no. F23.
| Original language | English |
|---|---|
| Pages (from-to) | 583-600 |
| Number of pages | 18 |
| Journal | Review of World Economics |
| Volume | 139 |
| Issue number | 4 |
| DOIs | |
| Publication status | Published - 2003 |
Bibliographical note
Funding Information:Remark: We are grateful to an anonymous referee, participants at the EEA conference in Lausanne, a CEPR meeting in Madrid and a seminar at the University of Manchester for helpfifl comments on an earlier draft. All remaining errors are, of course, our own. Financial support through the European Commission Fifth Frame-work Programme (Grant No. HPSE-CT-1999-O0017)a nd the Leverhulme Trust (Grant No. Fll4/BF) is gratefully acknowledged. Please address correspondence to Holger G6rg, School of Economics, University of Nottingham, Nottingham NG7 2RD, UK; e-mail: Holger.Gorg@nottingham.ac.uk
Keywords
- Agglomerations
- Demonstration effects
- Foreign direct investment
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)
