Heterogeneity of Economic Space: Introduction of the Problem

Part of the Studies in Economic Transition book series (SET)


Although there is a common understanding that almost all industries are somewhat localized, a number of studies measure the localization levels of FDI and its influence on host economies. That relationship between collocating firms and the formation of centers of economic activity within a country influence the location choices of future entrants into that country (von Thünen, 1826, trans, of 1966; Marshall, 1920; Krugman, 1991). Also, so-called “Marshallian factor” market externalities (David and Rosenbloom, 1990), which include capital stock and size of the labor force and markets, strongly contribute to the growth and competitiveness of urban-industrial agglomerations, thereby enhancing the attractiveness of a region to potential foreign investors. Even earlier than Marshall, Adam Smith (1776) spoke of trade impacts on location decisions, suggesting that trade and location are interrelated and have a significant role in regional economic geography.


Foreign Direct Investment Foreign Investment Foreign Firm Location Choice Entry Mode 
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Copyright information

© Arkadiusz Mironko 2014

Authors and Affiliations

  1. 1.The A. Gary Anderson Graduate School of ManagementUniversity of CaliforniaUK
  2. 2.Rotterdam School of ManagementErasmus UniversityNetherlands

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