The determinants of the location of foreign direct investment in UK regions

Dimitra Dimitropoulou; Philip McCann; Simon P. Burke

doi:10.1080/00036846.2011.558482

The determinants of the location of foreign direct investment in UK regions

Dimitra Dimitropoulou, Philip McCann^*, Simon P. Burke

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Abstract

This article employs a database of over 2000 observations of Foreign Direct Investment (FDI) projects in UK regions. We analyse this data by means of various multinomial and conditional logit models in order to identify the major determinants of the location choices of these inward investments. Having controlled for the various characteristics of inward investing firms, the projects and the regions, our results suggest that existing regional specialization is the single most important determining feature of where inward FDI locates. In addition, London is seen to benefit primarily by the immigration of new investments, the majority of which are related to service sector activities.

Original language	English
Pages (from-to)	3853-3862
Number of pages	10
Journal	Applied Economics
Volume	45
Issue number	27
Early online date	12 Nov 2012
DOIs	https://doi.org/10.1080/00036846.2011.558482
Publication status	Published - Sept 2013

Keywords

foreign direct investment
location
multinomial logit
regional specialization

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10.1080/00036846.2011.558482

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AB - This article employs a database of over 2000 observations of Foreign Direct Investment (FDI) projects in UK regions. We analyse this data by means of various multinomial and conditional logit models in order to identify the major determinants of the location choices of these inward investments. Having controlled for the various characteristics of inward investing firms, the projects and the regions, our results suggest that existing regional specialization is the single most important determining feature of where inward FDI locates. In addition, London is seen to benefit primarily by the immigration of new investments, the majority of which are related to service sector activities.

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The determinants of the location of foreign direct investment in UK regions

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Keywords

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