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Title:The location choices of foreign investors: A districtlevel analysis in India PDF Logo
Authors:Mukim, Megha
Nunnenkamp, Peter
Issue Date:2010
Series/Report no.:Kiel working paper 1628
Abstract:This paper analyzes the determinants of the location choices made by foreign investors at the district level in India to gauge the relative importance of economic geography factors, local business conditions, and the presence of previous foreign investors. We employ a discrete-choice model and Poisson regressions to control for the potential violation of the assumption of Independence of Irrelevant Alternatives. Our sample includes about 19,500 foreign investment projects approved in 447 districts from 1991-2005. We find that foreign investors strongly prefer locations where other foreign investors are. They are also attracted to industrially diverse locations and those with better infrastructure. We conclude that the concentration of FDI in a few locations could fuel regional divergence in post-reform India.
Subjects:FDI
economic geography
location choice
infrastructure
JEL:F23
R12
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des IfW
Kieler Arbeitspapiere, IfW

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