Industrial clusters, entrepreneurial culture and the social environment: The effects on FDI distribution

Using balance sheet data from a sample of 3498 foreign firms in the manufacturing industry we analyse the distribution of foreign direct investments (FDI) in Italy at a very detailed geographical level, i.e. the provincial level, a region which comprises an urban area and the limited geographical ar...

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Bibliographic Details
Published in:	International business review 2009-02, Vol.18 (1), p.76-88
Main Authors:	Majocchi, Antonio, Presutti, Manuela
Format:	Article
Language:	eng
Subjects:	Agglomeration economies Agglomeration economies Entrepreneurship FDI Industrial districts Entrepreneurship FDI Foreign direct investment Foreign enterprises Industrial districts Industrial structure Italy Location of industry Regional economics
Online Access:	Get full text
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Summary:	Using balance sheet data from a sample of 3498 foreign firms in the manufacturing industry we analyse the distribution of foreign direct investments (FDI) in Italy at a very detailed geographical level, i.e. the provincial level, a region which comprises an urban area and the limited geographical area surrounding it. In this paper, we test the impact that agglomeration economies, entrepreneurial culture and social capital have on the distribution of foreign investments. While the findings regarding the social variables are mixed, the important role played by agglomeration economies is confirmed. Our analysis shows that investments by multinationals are attracted by those areas that combine industrial cluster characteristics with an agglomeration of foreign firms and that have a high level of entrepreneurial culture. The role that this last variable plays is fundamental and suggests the idea that multinational corporations (MNCs) invest in regions with entrepreneurial resources.
ISSN:	0969-5931 1873-6149