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Abstract for:

On the Relative Importance of Agglomeration Economies in the Location of FDI Across British Regions

Jonathan  Jones,  Colin  Wren,  August 2011
Paper No' SERCDP0089: | Full paper (pdf)
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Keywords: Industrial location; agglomeration economies; intermediate goods; FDI

JEL Classification: H3; O2; L2; R3

Is hard copy/paper copy available? YES - Paper Copy Still In Print.
This Paper is published under the following series: SERC Discussion Papers
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The paper examines the relative importance for industrial location of production linkages and knowledge spillovers, distinguishing between intermediate and non-intermediate goods that are backwards or forwards in nature. A novel approach is used to construct proxies for non-intermediate goods at a sub-national industry level based on an Input-Output transaction table. Taking data on location decisions by foreign-owned plants across British regions over 1985-2007, the paper finds support for the new economic geography explanation of location based on linkages over that due to spillovers. However, the importance of intermediate and non-intermediate linkages differs between manufacturing and service industries.