A Measure of the Spillover Effects Among Companies of Same Nationality in the Location Choice of FDIs
Foreign direct investments (FDIs) have grown rapidly with globalization. Despite the recent emergence of protectionism, this increase in FDIs will not reverse. Nonetheless, a recent article in The Economist predicts the decrease of FDIs. Both the convergence of technologies according to globalization and the decrease of transportation costs due to technological advances are mentioned as the main causes. However, if there are strong incentives to attract FDIs, then this prediction will not be realized. It is important to find out strong attractions in investment destinations and measure their intensities. If these intensities are large enough, the increasing trend of FDIs can be retained but how can these intensities be identified and measured?
This work was supported by the Ministry of Education of the Republic of Korea and the National Research Foundation of Korea (NRF-2017S1A5A2A01026341).
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