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Applied Economics

Host Country Characteristics and Agglomeration in Foreign Direct Investment

Journal Article
Braunerhjelm, Pontus and Roger Svensson (1996). “Host Country Characteristics and Agglomeration in Foreign Direct Investment”. Applied Economics 28(7), 833–840.

Pontus Braunerhjelm, Roger Svensson

By combining unique data on Swedish multinationals with industry data for 18 countries, the influence of host country characteristics on the location of foreign production is analysed. Particular attention is directed towards agglomeration tendencies in firms' location. The sample selection incorporates countries where firms have no affiliate production, which is an extension of previous research in this area. The results suggest that agglomeration effects are present, predominantly in technologically advanced industries. It is also shown that market size, the supply of skilled labour and earlier exports pattern, affect the location of overseas production.

Roger Svensson

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