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FDI Location across British Regions and Agglomerative Forces: A Markov Analysis

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


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This paper analyses the location of foreign direct investment across the regions of Great Britain over 1985-2005 using the framework of discretized Markov chains. FDI is measured according to the regional share of inward investment projects, where a distinction is made between manufacturing and services, and industries with different FDI growth profiles. The paper finds convergence in location, which is strong in manufacturing arising from a North-to-South shift in location. This seems to be related to a weakening of UK regional policy, and suggests that while policy can overcome agglomeration economies, it is not self-sustaining. In services, there is some spreading out of FDI location, but no evidence of a South-to-North shift, which has implications for regional development.

Publication metadata

Author(s): Wren C, Jones J

Publication type: Article

Publication status: Published

Journal: Spatial Economic Analysis

Year: 2012

Volume: 7

Issue: 2

Pages: 265-286

Print publication date: 20/04/2012

ISSN (print): 1742-1772

ISSN (electronic): 1742-1780

Publisher: Routledge


DOI: 10.1080/17421772.2012.669492


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