FDI and regional development policy

The transformations in the worldwide division of labour brought about by globalisation and technological change have shown an unintended negative effect, particularly evident in advanced economic systems: uneven spatial distribution of wealth and rising within-country inequality. Although the latter has featured prominently in recent academic and policy debates, in this paper we argue that the relevance of connectivity (here proxied by foreign capital investments, FDI) for regional economic development is still underestimated and suffers from a nation-biased perspective. As a consequence, the relationship between the spatial inequality spurred by the global division of labour and the changes in the structural advantages of regions remains to be fully understood in its implications for economic growth, territorial resilience and industrial policy. Furthermore, even though connectivity entails bi-directional links – i.e. with regions being simultaneously receivers and senders – attractiveness to foreign capital has long been at the centre of policy attention whilst internationalisation through investment abroad has been disregarded, and sometimes purposely ignored, in regional development policy agendas. We use three broad-brushed European case-studies to discuss some guiding principles for a place-sensitive regional policy eager to integrate the connectivity dimension in pursuing local economic development and territorial equity

The Use of Game Theoretical Models FOR EMPIRICAL INDUSTRIAL ORGANIZATION

This paper surveys the literature in which non cooperative game theory has been applied to empirical industrial organization. We concentrate on the research on structure and performance since game theory made its most profound inroads in this field and in industrial organisation in general, and- while it now spreads to all other fields in economics- empirical applications are coming up with an increasing rate. We focus on the econometric testing of real world data, mainly in the core area of industrial economics namely the relation between market structure and performance. We discuss the goals, results and problems involved in the existing literature and propose topics and methods which look promising. We expect empirical work based on game theoretical models to become a growth area in industrial organization following the progress made in theory over the past decades