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The dynamics of FDI location: a markov analysis for British regions

By Jonathan Jones and Colin Wren

Abstract

The paper uses the framework of Markov chains to examine convergence in the location of inward foreign direct investment across the regions of Great Britain over 1985-2005. An analysis is undertaken by industry group that disaggregates manufacturing and services. It finds convergence in regional FDI shares, both overall and by industry, which supports agglomeration. As explanations, a weakening of regional policy has led manufacturing FDI to spread-out from ‘north’ to ‘south’, but in services there is a shift in FDI location within the ‘south’ from core to contiguous regions, suggesting diseconomies at the core. The paper finds different spatial processes and draws implications for regional policy

Topics: G Geography (General), HC Economic History and Conditions
Publisher: Spatial Economics Research Centre (SERC), London School of Economics and Political Science
Year: 2009
OAI identifier: oai:eprints.lse.ac.uk:33497
Provided by: LSE Research Online

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