Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/203986 
Year of Publication: 
2015
Series/Report no.: 
wiiw Working Paper No. 121
Publisher: 
The Vienna Institute for International Economic Studies (wiiw), Vienna
Abstract: 
Abstract The attractiveness of a country for foreign direct investors stems from domestic factors but also from its interconnectedness with the global economy. While knowledge spillovers and domestic inter-industry linkages have been examined by the literature on FDI location, international linkages have been neglected due to data constraints. Using global input-output data, this paper investigates the role of backward and forward production linkages between countries for location choices of first-time greenfield FDI investors in the EU along with traditional agglomeration forces. In line with the literature it is found that firms tend to co-locate with other firms from the same country and industry. Most importantly, inter-industry linkages between the source and the host country emerge as an important attraction factor while the same does not hold for domestic inter-industry linkages.
Subjects: 
foreign direct investment
multinational enterprises
location choice
agglomeration
international linkages
JEL: 
F21
F23
R30
Document Type: 
Working Paper

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