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The Motives for the FDI Location Choice in the ‘Old’ and ‘New’ Europe

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


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This paper offers comprehensive cross-country evidence on the motives that drive FDI location in the European Union and examines how these motives differ be-tween ‘old’ and ‘new’ EU Member States. Specifically, the paper examines three main motives for FDI: market-seeking, resource-seeking and efficiency-seeking through economies of scale, where the latter is captured by expansionary investment. The study uses the European Investment Monitor database, which contains in-formation on the location of over 35,000 individual cross-border investment projects that were implemented in the EU between 1997 and 2010. Using the conditional logit model the results show that investment in the ‘old’ EU is predominantly resource-seeking, whereas in the ‘new’ EU it is market-seeking including access to the European Single Market. On the third motive, our results show that the expansions are subject to market-access and resource-seeking motives and there-fore, are not simply about adding scale to existing operations for the purpose of achieving greater economies to scale.

Publication metadata

Author(s): Serwicka I, Jones J, Wren C

Publication type: Conference Proceedings (inc. Abstract)

Publication status: Published

Conference Name: 54th Congress of European Regional Science Association

Year of Conference: 2014

Online publication date: 26/09/2014

Acceptance date: 01/01/1900

Publisher: ERSA


Series Title: ERSA Conference Papers