Information Costs and Location of FDIs within the Host Country: Empirical Evidence from Italy

Mariotti, Sergio; Piscitello, Lucia

doi:10.1057/palgrave.jibs.8490821

Cited by 164 publications

(112 citation statements)

References 29 publications

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“…It is noteworthy to mention that information acquisition involves cost; therefore, in a world full of incomplete and asymmetric information, institutions help economic agents to economize on the basis of information and transaction costs (Hoskisson et al, 2000;Mudambi & Navarra, 2002). Due to high information cost that foreign investors have to incur relative to their counterparts local investors; the location decisions behaviours of foreign firms are informational driven (Goldstein & Razin, 2006;Mariotti & Piscitello, 1995). As a location response to the information asymmetry and uncertainties in foreign markets; foreign investors are likely to choose investment locations which offer better access to information in order to minimize their information cost (Azubuike, 2006;He, 2002;Mariotti & Piscitello, 1995).…”

Section: Theorymentioning

confidence: 99%

Impact of E-Government on Transaction Cost and FDI Inflows: A Proposed Conceptual Framework

Kachwamba¹

2011

IJBM

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Although vast normative e-government literature supports the assertion that implementation of e-government reduces transaction cost and promotes Foreign Direct Investment; empirical evidence to support this thesis is limited. Even more, there is limited attempt when studying this phenomenon to integrate e-government literature with other literatures in which major constructs of interest are rooted. This article contributes to reducing this gap by establishing a conceptual framework that integrates e-government literature, International Business and Economics literatures as the main fields from which major constructs of interest are grounded. Three Propositions are generated as a guide for a systematic empirical investigation of the phenomenon.

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Section: Theorymentioning

confidence: 99%

Impact of E-Government on Transaction Cost and FDI Inflows: A Proposed Conceptual Framework

Kachwamba¹

2011

IJBM

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“…It is often argued in the literature that the market served by foreign firms is rarely limited to a 'location', especially if the 'location' is small, like the Romanian counties in our study (e.g., COUGHLIN andSEGEV, 2000 andMARIOTTI andPISCITELLO, 1995). Hence, we include the (log of the) broader regional GDP rather than the county-level GDP in order to more accurately measure market potential.…”

Section: Other Location Factorsmentioning

confidence: 99%

“…For example, uncertainty with regard to locational quality and subsequent information and search costs are much higher for foreign compared to domestic investors (CAVES, 1996). Since an existing concentration of foreign firms facilitates the gathering of information on the local environment, either via business relationships or because it demonstrates the location's potential, economies from foreign agglomeration may be very important for international investors but less so for domestic ones (e.g., MARIOTTI and PISCITELLO, 1995;GUIMARÃES et al, 2000). More generally, a number of studies have found that foreign companies value various location factors different than domestic firms (e.g., WOODWARD, 1988 and1989).…”

Section: Introductionmentioning

confidence: 99%

Agglomeration Economies and the Location of Foreign Direct Investment: Empirical Evidence from Romania

Hilber¹,

Voicu²

2009

Regional Studies

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Hilber C. A. L. and Voicu I. Agglomeration economies and the location of foreign direct investment: empirical evidence from Romania, Regional Studies. The large inflow of foreign direct investment into Romania, after the revolution in 1989, is exploited to study the determinants of foreign direct investment location in transition economies. Using a conditional logit set-up and choice-specific fixed-effects, it is found that external economies from service agglomeration are the main determinant of foreign direct investment location. An increase in service employment density by 10.0% makes the average Romanian county 11.9% more likely to attract a foreign investor. Industry-specific foreign and domestic agglomeration economies and labour conflicts also impact foreign direct investment location. A comparison with findings of other studies suggests that service agglomeration economies may be geographically quite localized. [image omitted] Hilber C. A. L. et Voicu I. Les economies d'agglomeration et la localisation de l'Investissement direct etranger: des preuves empiriques provenant de la Roumanie, Regional Studies. Cet article approfondit le flux important d'Ide a destination de la Roumanie, suite a la revolution de 1989, afin d'etudier les determinants de la localisation de l'Ide dans les economies de transition. A partir d'un modele du type logit conditionnel et des effets specifiques aux choix, il s'avere que des economies externes dues a l'agglomeration des services sont les principaux determinants de la localisation de l'Ide. Une hausse de la densite de l'emploi tertiaire de 10 pourcent rend le comte roumanien moyen 11.9 pourcent plus susceptible d'attirer un investisseur etranger. Des economies d'agglomeration interieures et exterieures, specifiques a l'industrie, et les conflits du travail influent aussi sur la localisation de l'Ide. Une comparaison avec les resultats des etudes anterieures laisse supposer que les economies d'agglomeration du secteur tertiaire pourraient s'averer assez localisees du point de vue geographique. Economies d'agglomeration Investissement direct etranger Economies de transition Hilber C. A. L. und Voicu I. Agglomerationsvorteile und der Standort von auslandischen Direktinvestitionen: empirische Evidenz aus Rumanien, Regional Studies. Wir nutzen den starken Zustrom von auslandischen Direktinvestitionen nach Rumanien in der Zeit nach der Revolution von 1989 zur Analyse der Standorts-Determinanten von auslandischen Direktinvestitionen in Reformlandern. Mit Hilfe von konditionalen Logit-Modellen und von standortspezifischen fixen Effekten, zeigen wir auf, dass externe Effekte von dienstleistungsspezifischen Agglomerationsvorteilen die wichtigste Determinante der Standortwahl darstellen. Eine 10-prozentige Zunahme der Beschaftigungsdichte im Dienstleistungssektor in einem durchschnittlichen rumanischen Bezirk erhoht die Wahrscheinlichkeit, dass ein auslandischer Investor angezogen wird, um 11.9 Prozent. Auch branchenspezifische auslandische und einheimische Agglomerationsvorteile sowie ...

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“…This paper is not the first one that analyses location choices of multinational firms in Italy. Some other works have addressed the question of why some regions and provinces attract more FDI than other regions within Italy (Mariotti and Piscitello, 1995;Basile, 2002 andBronzini, 2004). However, in the present work we frame the choice of whether to locate in Italy in the broader context of locating in the EU.…”

Section: Introductionmentioning

confidence: 99%

Attracting Foreign Direct Investments in Europe: Are Italian Regions Doomed?

2005

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During the nineties, Europe became a major recipient of FDIs but Italian regions have been largely excluded from this process. Was it due to their characteristics, or were Italian regions 'doomed' by a negative country effect? In this paper we address this issue by estimating the determinants of multinational firms' location choices in 52 EU regions. We find that Italian regions indeed attracted significantly less than their observable potential, and that this could be explained by the inefficiency of the bureaucratic apparatus and of the legal system. The effect of taxes is instead strongly sensitive to the inclusion of agglomeration variables and is asymmetric across regions. JEL Codes: F23, C35, O52

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Information Costs and Location of FDIs within the Host Country: Empirical Evidence from Italy

Cited by 164 publications

References 29 publications

Impact of E-Government on Transaction Cost and FDI Inflows: A Proposed Conceptual Framework

Impact of E-Government on Transaction Cost and FDI Inflows: A Proposed Conceptual Framework

Agglomeration Economies and the Location of Foreign Direct Investment: Empirical Evidence from Romania

Attracting Foreign Direct Investments in Europe: Are Italian Regions Doomed?

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