The Determinants of Inward Foreign Direct Investment in Business Services across European Regions

• Published in: Regional studies 2016-04, Vol.50 (4), p.671-691
• Main Authors: Castellani, Davide, Meliciani, Valentina, Mirra, Loredana
• Format: Article
• Language: English
• Subjects: Ausländische Direktinvestitionen; Business; Business services; Concatenaciones progresivas; Dependence; Determinants; Especialización regional; Europe; Foreign direct investment; Foreign direct investment (FDI); Foreign investment; Forward linkages; Geschäftsdienste; Inversión directa extranjera (IDE); Investissement direct étranger (Ide); Investment; Investors; Liens en aval; Manufacturing; Manufacturing industry; Nuts; Regional specialization; Regional studies; Regionale Spezialisierung; Regions; Services; Services aux entreprises; Servicios comerciales; Spatial discrimination; Spécialisation régionale; Vorwärtskopplungen; 前向联系; 区域专殊化; 商业服务; 外国直接投资（FDI）
• ISSN: 0034-3404; 1360-0591
• DOI: 10.1080/00343404.2014.928677

Castellani D., Meliciani V. and Mirra L. The determinants of inward foreign direct investment in business services across European regions, Regional Studies. The role of forward linkages with manufacturing sectors and other service sectors as attractors of business services foreign direct investment (FDI) is studied at the regional level. Using data on 146 NUTS-2 regions, it is found that regions specialized in those (manufacturing) sectors that are high potential users of business services attract more FDI in the business services than other regions. Results are robust to the inclusion of the traditional determinants of foreign investments at the regional level as well as to controls for spatial dependence. The results suggest that regional policies aimed at attracting foreign investors in the business service industry might prove ineffective in the absence of a pre-existing local intermediate demand.