Foreign and domestic investment:regional development or crowding out?

Driffield, Nigel and Hughes, Dylan (2003). Foreign and domestic investment:regional development or crowding out? Regional studies, 37 (3), pp. 277-288.

Abstract

This paper tests, at the regional and industry level, the extent to which domestic investment is stimulated or crowded out by inward foreign direct investment. The paper develops a model of domestic investment, based on standard models drawn from macroeconomics and industrial economics. The paper then goes on to show that, at a general level, the 'development' or agglomeration hypothesis is confirmed that domestic investment is indeed stimulated by inward investment. However, there is also evidence that, in certain regions, inward investment has crowded out domestic investment. The implications of this from the perspective of regional policy are briefly discussed.

Publication DOI: https://doi.org/10.1080/0034340032000065433
Divisions: Aston Business School > Economics finance & entrepreneurship
Aston Business School > Economics finance & entrepreneurship research group
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Additional Information: This is an Author's Accepted Manuscript of an article published in Driffield, N., & Hughes, D. (2003). Foreign and domestic investment: regional development or crowding out?. Regional studies, 37(3), 277-288. Regional studies 2003 © Regional Studies Association, Taylor & Francis, available online at:http://www.tandfonline.com/10.1080/0034340032000065433
Uncontrolled Keywords: inward investment,domestic investment,crowding out
Published Date: 2003-05

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