Agglomeration effects and the location of FDI: evidence from French first-time movers

This paper analyses the location choice determinants of French first-time investments in Europe, North America and North Africa. Firm locations are examined on two geographical scales, the national and regional level. The final sample comprises 307 location choices in 27 countries and across 45 regions. Both, location- and firm-specific variables are used for analyzing investment strategies. The results show that higher market demand and cultural proximity to France increase the likelihood of a particular location to be chosen, whereas higher labour cost and a larger distance between a foreign location and the headquarters deter FDI investments. Manufacturing and older companies are more likely to establish their first subsidiary in Eastern Europe. Furthermore, this study examines the extent to which French investors choose foreign locations that already host a significant number of French firms. The results obtained from regressions with various absolute and relative agglomeration measures suggest that French investors are rather attracted by firm cluster in general, or by the unobserved factors that led to the agglomeration in the first place, than by any nation-specific firm cluster.     

Distance,time since foreign entry,and productivity spillovers from foreign direct investment

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.     

Spatial pattern of Japanese manufacturing industry in four ASEAN countries

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.Received: 21 May 2002, Accepted: 14 May 2003, JEL Classification: F21, N950, R12The authors would like to thank two anonymous referees for their valuable comments on an earlier draft of this research note.     

Foreign direct investment in American service sectors: source country contrasts and locational determinants

Foreign direct investment in United States service sectors is an essential component of the competition among global industrial core regions. European, Canadian, and Japanese firms generate most foreign services jobs. Acquisition is the favored mode of entry and foreign establishments are generally larger and pay higher wages than their domestic counterparts. Though the surge of foreign investment in the 1980s was sectorally extensive, jobs in foreign services firms grew much faster than those in manufacturing. This paper reports a regression analysis of the location of foreign employment in six disaggregated sectors across U.S. states in 1987. The results show that foreign and domestic interstate locational patterns of employment strongly correlate. Because acquisition is the most common mode of entry, this empirical finding suggests that the supply of acquisition candidates primarily decides foreign investors' locational choices. Additional influences on location include the concentration of jobs in foreign business and professional services firms in localized areas of production, a general attraction of foreign investors in most service sectors to states with skilled labor forces, and an avoidance of Rocky Mountain and Great Plains states. I found little evidence that foreign investors in services avoid high-wage states more than their domestic counterparts.     

Sectoral differences in the determinants of the location of foreign direct investment in American manufacturing

Foreign direct investment in the United States is an integral part of the competition among global industrial core regions. Most foreign investment in the U.S. originates in Europe, Canada, and Japan. Acquisition rather than new plant establishment is the favored mode of investment and the interregional supply of potential acquisition candidates constrains foreign investors' locational choices. This paper provides an analysis of the location of foreign employment in 15 disaggregated sectors across U.S. states in 1990. The results show that foreign firms concentrate employment in existing regions of production. Foreign investments in most raw materials processing sectors particularly favor these places. Some decentralization has occurred in several sectors, especially food, paper, chemicals and petroleum, rubber and plastics, stone, clay and glass products, and primary metals. Other significant determinants of location include labor force characteristics and certain regional preferences. No evidence was found in our analysis of disaggregate sectors that foreign investors avoid strong unions more than their domestic counterparts.     

Firm's profitability and regulation in water and network industries: An empirical analysis

The profitability of a firm is a highly complex concept, as it results from firms' decisions on investment and production plans, but also from constraints beyond their control (economic regulation, level of competition, economic growth). We analyze the profitability of firms in the water industry by focusing on the impact of economic regulation and the economic environment. The objective is to determine empirical regularities which could explain profitability. Using a panel of firms from developed and transition countries, we show that the profitability of firms in the water sector is in line with that in other network industries. Profitability varies greatly depending on the chosen measure of profitability, firm's size, the economic environment and the characteristics of regulation in place are essential to understand and explain firm's profitability. In particular, being regulated by a price-cap scheme appears to be an important determinant of profitability.     

Understanding social system drivers of green building innovation adoption in emerging market countries: The role of foreign direct investment

There has been a growing academic focus on the economic, environmental, and social implications of sustainable innovation adoption. This work has largely focused on the developed world, yet the majority of people and future economic growth lies in the developing world. Further, most research examines micro data on consumers or firms, limiting what is known regarding the role of macro factors on diffusion, such as social systems. Addressing these limitations, this research provides the first high-level insights into how green building adoption is occurring in developing countries. Utilizing a hand-collected dataset of all green building certification activity in 97 emerging market countries over fifteen years, we examine the relationship between economic development and green building adoption. We find the use of international certification programs is far more common than domestic programs, and that domestic programs have only been originated in advanced emerging economies. Additionally, we observe a relationship between foreign direct investment into emerging markets countries and the proliferation of green building, and that in most cases, domestic certification programs only originate after international certification activity has been introduced to the local economy. Our findings carry economic and policy implications, worthy of consideration by both those interested in offering and attracting foreign investment in emerging market countries.     

FDI and immigration: a regional analysis

Does immigration affect foreign direct investment? Existing studies on immigration and FDI have all looked at aggregate flows at the national level, arguing that immigrant networks lower the risk of foreign investment through increased information flows and a built in market. However, these national-level studies suffer from identification problems since many of the factors that attract immigrants also attract FDI. This study improves upon identification by looking at the regional distribution of both FDI and immigration from 10 source countries to the 50 US states. Using a unique measure of immigrant network size in each state, I find that immigration is not only positively correlated with FDI, it tends to lead it as well. Comparing a state with an average sized immigrant network to one with a network twice as large, I estimate that the stronger network state will get on average 20 more foreign-owned affiliates opening per year, an effect that is quite persistent over time. On average, more skilled immigrant communities attract more FDI, while the pull effect of immigration on FDI also increases with immigrant ties to native countries and with immigrant influence in local communities. These results suggest that immigration creates a positive externality in foreign investment that must be considered when assessing the costs and benefits of labor mobility.     

The interplay between leadership and organizational culture in the Turkish construction sector

Organizational culture and leadership are purported to be deeply integrated and intertwined within an organization. Although there is a substantial amount of research demonstrating the importance of the interplay of culture and leadership, there exist few empirical examinations of the nature of this link. To examine this link, based on Cameron and Quinn's Organizational Culture Assessment Instrument and Hofstede's Values Survey Module, a questionnaire survey was conducted. The sample consists of 499 managerial personnel out of 107 contracting firms. With the aim of achieving a better understanding of how leadership style is influenced by organizational culture, Multinomial Logistic Regression was used. The findings demonstrate that managers in the contracting companies with different cultural characteristics tend to adopt different leadership styles to lead their employees to succeed in their business. Information contained in this paper will feed into country-specific understanding of leadership and organizational culture within the construction industry.     

OUT OF THE GOODNESS OF THEIR HEARTS? REGULATORY AND REGIONAL IMPACTS ON BANK INVESTMENT IN HOUSING AND COMMUNITY DEVELOPMENT IN THE UNITED STATES

ABSTRACT: Banks are considered key actors in affordable housing and community development in the United States. Their involvement in such activities may be due partly to their dependence on economic rents generated from development. In the United States, however, banks are encouraged to support such activities by the federal 1977 Community Reinvestment Act (CRA). I examine how different factors explain the CRA‐qualified investments by banks. Qualified investments are essentially nondebt financial resources provided as an equity investment or grant with a community development purpose. I find that the identity of the regulator (the United States has four banking regulators) has a major impact on the level of qualified investments. Other things equal, a difference in regulators can cause a bank's qualified investments to more than double. Besides suggesting that some regulators may be enforcing a major portion of CRA regulations more vigorously than others, this also suggests that the CRA plays a major role in bank investment in community development. This has policy implications not just in the United States but also in other countries that might consider replicating the CRA.     

Building for the future: the potential importance of the construction industry in Welsh economic development policy

Government aid offered to Wales, and largely spent on attracting foreign direct investment, has yet to provide tangible benefits in terms of relative economic prosperity and sustained job creation. The present policy focus is therefore now concerned with creating innovative solutions led by local individuals, firms and communities. New economic strategic aims and objectives have failed to attach significance to the potential importance of the construction sector in assisting this economic regeneration of regions and, in particular, the benefits that can be derived from the development of the small construction enterprise (SCE). It is argued that for the SCE to survive and grow, it is necessary both to acknowledge the role of small firms and to develop beneficial training packages. Moreover, it is imperative that such new initiatives engender an inclusive culture that meet the needs of all contracting parties and aspires to the notion of increased profitability for all.     

Foreign firms in core or peripheral areas? The spatial dimension of job creation and wages in Sub-Saharan Africa

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.     

Collaboration objectives and the location of the university partner: Evidence from the Piedmont region in Italy

This study examines firms' decisions to collaborate with universities in their region as opposed to non‐regional universities, focusing on the role of collaboration objectives. Through a survey of a representative sample of manufacturing firms in the Piedmont region (Italy), we find that firms seeking business advice are more likely to collaborate with regional universities while firms seeking R&D support and testing and analysis services are more likely to collaborate with both regional and non‐regional universities. The partner university's location is endogenous to the level of investment in the collaboration; and the collaboration objectives provide good instruments. Some implications for regional policy are discussed.     

Foreign direct investment,industrial location and capital taxation

This paper demonstrates from a theoretical point of view that governments can affect the location decision of firms using tax rate on capital income as a policy instrument. We find that, in general, countries with a lower tax burden are net receivers of foreign direct investment. Furthermore, fiscal pressure interacts with the quality of infrastructures to exert a combined influence on the equilibrium location of the firms. Financial support from FEDER and project BEC2003-02271 is gratefully acknowledged.     

传统文化在景观建筑设计教育中的品质构建——以中国传统园林设计教学为例

一个民族的传统文化是构建本民族建筑精神文化的基础。在全球一体化时代,我们自身所拥有的中国传统文化越深厚,对外来文化的承载力和选择能力就越强,更利于构建出中国建筑的文化精神。基于中国传统文化在建筑发展中的基础作用,景观建筑设计专业确立了"以传统文化为基石"的教学原则。每个年级设置一个传统文化承继和发展的专题课程,探求传统文化对景观建筑教育品质的提升。其中中国传统园林设计是综合性最为突出的课程,引导学生体验传统文化内涵与空间架构的关联,以及推动学生对传统文化的理解和延展,进而提升教学品质等方面进行了较有成效的探求。     

Total factor productivity growth accounting in the construction industry of Singapore

Total factor productivity (TFP) determines long‐term economic growth and is a comprehensive industry‐level productivity measure. This paper proposes Jorgenson's method as an appropriate TFP measurement for the construction industry. The method is less restrictive than the conventional Chau's approach, as it does not impose the Hick Neutral Technical Change assumption. Jorgenson's method is then applied to estimate TFP growth in the construction industry of Singapore over 1984–1998. TFP growth is found down by 1.53% per annum over this period, indicating that the performance of TFP in the construction industry lags behind the rest of economy. TFP growth is also found to be fluctuating over time and tends to move in tandem with the construction business cycle.

As a monitor of progress towards TFP achievement, factors influencing TFP growth in the construction industry of Singapore over 1984–1997 are identified. Seven factors are found to be significantly related to TFP growth. Among them, economies of scale, R&D by the industry, investment allowance granted and labour unions are leading contributors to TFP growth; while foreign worker, construction accidents and pre‐cast are major hampers.

The general methodology presented in this study can be applied to other countries. Future studies are required to find appropriate indicators for factors unquantified.     

我国金矿资源勘查开发引进外资竞争力的研究

自１９９０ 年以来,全世界己有７５ 个国家（ 发展中国家为主） 修改了（ 或引入了新的） 矿产资源法,制定了新的有利于引进外资的税制及各项优惠政策,提高了在国际上吸引外资勘查开发本国矿产资源的竞争力。近年来,国际上金矿资源勘查开发的投资流向主要集中于南美、东南亚及中亚等新兴市场国家。从影响金矿资源勘查开发的国际投资等因素入手,通过与新兴市场国家投资环境的对比,着重分析了我国目前引进外资困难局面的症结所在及利用外资的优势,提出了改善投资环境的建议。     

Housing Investment: Long Run International Trends and Volatility

Using long-run data for today's advanced economies, the pattern of housing investment is examined from the 19th century to the present day. Housing investment is shown to be subject to long cycles, the most pronounced of which were in the post-1945 era. Since 1970 the trend of housing investment has been flat for most countries considered, and falling as shares of national income. Fluctuations in housing investment demand may have helped to stabilise the world economy during the 1950s and 1960s but since then have switched to become a destabilising factor.     

The Proof of the Planning Is in the Platting: An Evaluation of Florida's Hurricane Exposure Mitigation Planning Mandate

Problem: In his “Competitive Advantages of the Inner City” papers, Michael Porter maintained that comparative advantages of inner-city economies, once recognized, would lure profit-motivated investors to start new ventures and expand existing businesses in these areas. Porter stressed limited access to financing as a major barrier to inner-city economic development and its expanded provision as a remedy.

Purpose: I consider whether Porter's claims match the evidence.

Methods: I investigate both private and government-assisted providers of debt and equity capital to inner-city businesses that appear to exhibit Porter's competitive advantages. I distinguish successful inner-city business financing operations from those that are unsuccessful and use these results to draw lessons about effective and ineffective strategies for increasing inner-city businesses’ access to financing.

Results and conclusions: Lack of financing appears to be an important barrier to inner-city economic development, as Porter concluded, but the comparative advantages he thought made the inner city attractive to profit-seeking investors have not been demonstrated. Porter asserted that inner-city households seeking to buy consumer products were underserved by local firms. However, other researchers did not find this to be the case and new business ventures serving this market have had poor profits and poor rates of survival over time. Porter's revitalization blueprint aimed to create jobs and sustainable businesses to benefit inner-city residents, yet evidence indicates that inner-city firms largely meet their staffing needs by employing workers living outside the inner city. Private venture capital investment in the inner city has not generated attractive returns. However, inner-city lending can be profitable under the right conditions.

Takeaway for practice: There is a lack of business financing available to fund the creation and expansion of inner-city ventures, creating a barrier to inner-city economic development. However, my case studies illustrate that private lenders can be profitable in this market if they have: (a) a sufficiently large and diverse portfolio of investments; (b) lending policies requiring sufficient collateral or loan guarantees to offset defaults; and (c) skilled, experienced, professional managers.

Research support: None.