University of Cambridge > Talks.cam > Land Economy Seminar Series > On the Relative Strength of Industrial Linkages and Spillovers in Plant Location: Evidence for British Inward FDI, 1985-2007.

On the Relative Strength of Industrial Linkages and Spillovers in Plant Location: Evidence for British Inward FDI, 1985-2007.

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Traditionally, regional economists stress the importance of pecuniary external effects in the location of industry through market-based linkages, but more recently attention has focused on spillovers in the form of knowledge and technology. This paper takes data for 13,000 foreign direct investment (FDI) location decisions across the regions of Great Britain to examine the relative strength of these agglomeration economies. Linkages are measured at the regional level using input-output tables, disaggregated by forward and backward effects, and several kinds of spillover are measured. The paper finds that both types of economy are present, but that market-based effects dominate the spillovers, even for services. The paper provides support for the New Economic Geography over the New Growth Theory as an explanation for location.

This talk is part of the Land Economy Seminar Series series.

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