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Assessing the Regional Impact of Grants on FDI Location: Evidence from U.K. Regional Policy, 1985-2005

Lookup NU author(s): Professor Colin Wren, Dr Jonathan JonesORCiD

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Abstract

The paper implements a methodology for assessing the regional impact of investment grants on foreign direct investment (FDI) location, taking data for U.K. regional policy over the period 1985–2005. Using a Generalized Methods of Moments estimator it finds that each £25 million of grant changes the regional location of about six inward FDI projects. On average, projects have 150 jobs and each job diverted costs £27,500 (1995 prices). It also finds that the size of the area designated for grants has a positive location effect. The effect is small in relation to the overall scale of FDI, which may explain the weak grant effect found in recent plant-based location studies.

Publication metadata

Author(s): Wren C, Jones J

Publication type: Article

Publication status: Published

Journal: Journal of Regional Science

Year: 2011

Volume: 51

Issue: 3

Pages: 497-517

Print publication date: 24/11/2010

ISSN (print): 0022-4146

ISSN (electronic): 1467-9787

Publisher: Wiley-Blackwell Publishing, Inc.

URL: http://dx.doi.org/10.1111/j.1467-9787.2010.00708.x

DOI: 10.1111/j.1467-9787.2010.00708.x

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