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We investigate the migration‐inward foreign direct investment (FDI) nexus in narrow geographies. A novel two‐stage empirical strategy allows us to investigate the role of migration as a determinant of multinational enterprises (MNEs) location choices and unpick heterogeneity in foreign investors' preferences towards the presence of migrants in the host location. This allows us to shed light on the relative importance of the underlying mechanisms linking migration and inward FDI. Relying on 1113 greenfield investments by 895 MNEs in Italian NUTS3 regions over 2003–2015, we find that immigrants from the country of origin of the investor exert a positive but highly heterogeneous effect on MNE location choices. Investors are more sensitive to the presence of migrants from their country of origin when they lack experience in the destination country (first‐time investors) and when their investments concern market‐access or business‐services (downstream) activities. This is consistent with the view that migrants act as information brokers that bridge the fixed costs of international business activities. [ABSTRACT FROM AUTHOR]

The issue of whether firm productivity is affected by agglomeration externalities is a longstanding area of research. However, the appropriate geographical level to better detect the effects of agglomeration economies and at which level these externalities work is still unclear. Using detailed firm‐level longitudinal data on 4927 manufacturing firms in the United Kingdom over the period 2008–2016, we investigate the relation between the microgeography of external agglomeration economies and firm productivity. We compare different geographical levels: city‐wide and narrowly defined neighborhoods around a firm. Results from a multilevel (mixed‐effect) model show that urbanization externalities play a role at a higher level of geographical aggregation, such as the city, whereas localization externalities operate at a finer level, within the city and in a closer neighborhood to the firm. Failing to control for more granular levels of geography results in confounding the two types of externalities. We also provide novel evidence that these externalities vary across firm (such as age, size, and productivity) and location (such as population density) characteristics. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to examine how shocks suffered by rural households in Ethiopia influence their decision to borrow and the source of credit. Design/methodology/approach – First, suppose a household faces a set of four borrowing alternatives: only formal borrowing, only informal borrowing, both formal and informal borrowing, and non-borrowing. Second, the paper assumes that the random component is independently and identically distributed in accordance with the extreme value distribution. These assumptions lead to the multinomial logit model. The paper estimates the model using data from a survey of 350 rural households in Southern Ethiopia. Findings – The paper finds that shocks are important factors in explaining both the decision to borrow and the source of credit. In particular, negative shocks that affect household's assets, such as the seizing of farmland and theft, or human capital, such as the death of the family head, reduce the probability of borrowing from formal lenders or from both formal and informal lenders at the same time. The study supports only to some extent the assumption that informal credit contributes to smooth consumption. Last, networking effect is very significant and demonstrates how the two markets interact. Research limitations/implications – A model that would consider dynamic consumption patterns would have been more appropriate. In fact, one of the limitations of the study is the reliance on a cross-section analysis and the data is limited to just one village. Further research would extend the data set geographically and across time. Practical implications – The formal lenders are not willing to provide contingent loans, maybe because of a limited ability to assess and diversify risk. Besides, the available formal credit products are not proper to finance long term risk management strategies but pesticides, fertilizers and improved seeds that are entirely used in every agricultural cycle. In this regard, proper risk transfer strategies and instruments, as well as better tailored loan products, are needed in order to increase outreach into the rural areas. Originality/value – To the authors’ knowledge, this is the first paper that investigates how shocks influence the decision to borrow and the source of credit in Ethiopia. [ABSTRACT FROM AUTHOR]

Abstract: This paper argues that offshoring indices often measure something different than what we think they are. Using data from input-output tables of 21 European countries from 1995 to 2006 we decompose an offshoring index, distinguishing between a domestic (structural change) and an international component (imported inputs ratio). Regarding offshoring of business services, a large share of the index variation is driven by the domestic component. This is even more pronounced for overall service offshoring. In the case of material offshoring, by contrast, the international component drives the main variation of the indices. Our results therefore show that, regarding (business) services, the typical calculation of offshoring indices tends to over estimate the role of the imported inputs component, neglecting the role played by structural changes in the economy. [Copyright &y& Elsevier]

The article presents a study which examined the ambiguity of evidence of externalities or spillovers over the presence of multinational firms (MNFs). Noted is the way of understanding externalities which depend on the actions and corresponding costs for the firm. Moreover, it presence could be better assessed by either inducing changes in the firm's technology while the other on the prices of inputs used in production.

Higher productivity of multinational firms and exporters has been widely documented in the literature, but the sources of this heterogeneity are still a black box. Using an original dataset on Italian firms, we show that higher total factor productivity of international firms can be to some extent explained by higher R&D intensity and managerial capabilities. However, our results suggest that heterogeneity is more in the slope than in the constant of the production function. In particular, allowing international firms to have different return to labour and capital inputs, we are able to account for their entire productivity premium. This has implications for both labour and capital market reforms. [ABSTRACT FROM AUTHOR]

Using data on 5,102 subsidiaries established in the period 1991–1999, we examine the location choice of multinational firms of different nationalities in 47 regions of five EU countries. In particular we estimate a nested logit model and find that European multinationals consider regions across different countries as relatively closer substitutes than regions within national borders. This is consistent with the hypothesis that European regions compete to attract foreign direct investments relatively more across than within countries. However, in line with previous studies, we also find that national boundaries still play some role in choices made by non-European multinationals. [ABSTRACT FROM AUTHOR]

Abstract: This paper investigates the impact of outward foreign direct investment (FDI) by Italian multinationals on their total employment and skill composition. Specifically, by comparing data on 108 Italian manufacturing firms that became multinational (for the first time) in the period 1998–2004 with a counterfactual group of 2500 national firms that remained national in the same period, we provide descriptive and econometric evidence that the internationalisation of production activities did not reduce domestic employment in the parent companies neither for investments in developed or developing countries. As far as the skill composition is concerned, results reveal that only firms investing in Central and Eastern European countries experience some skill upgrading relative to firms that remained national. [Copyright &y& Elsevier]

This paper examines how different aspects of multinational experience affect the choice of international linkage strategy. Integrating transaction cost and dynamic efficiency considerations, we empirically test the determinants of the choice between acquisitions, joint ventures (JV), and strategic alliances (SA) for the world’s largest electronics corporations in 1993–1997. We show that “country specific experience” increases the probability of commitment intensive linkage modes (such as acquisitions and joint ventures), while a positive effect on strategic alliances is caused by “variety experience”, deriving from the heterogeneity of international contexts, and by “internationalisation experience” reflecting overall involvement in international markets. [Copyright &y& Elsevier]

We propose a geoadditive negative binomial model ( Geo- NB-GAM) for regional count data that allows us to address simultaneously some important methodological issues, such as spatial clustering, nonlinearities, and overdispersion. This model is applied to the study of location determinants of inward greenfield investments that occurred during 2003-2007 in 249 European regions. After presenting the data set and showing the presence of overdispersion and spatial clustering, we review the theoretical framework that motivates the choice of the location determinants included in the empirical model, and we highlight some reasons why the relationship between some of the covariates and the dependent variable might be nonlinear. The subsequent section first describes the solutions proposed by previous literature to tackle spatial clustering, nonlinearities, and overdispersion, and then presents the Geo- NB-GAM. The empirical analysis shows the good performance of Geo- NB-GAM. Notably, the inclusion of a geoadditive component (a smooth spatial trend surface) permits us to control for spatial unobserved heterogeneity that induces spatial clustering. Allowing for nonlinearities reveals, in keeping with theoretical predictions, that the positive effect of agglomeration economies fades as the density of economic activities reaches some threshold value. However, no matter how dense the economic activity becomes, our results suggest that congestion costs never overcome positive agglomeration externalities. Nuestra propuesta se basa en un modelo geoaditivo binomial (Geo-NB-GAM) para datos de recuento regionales ( regional count data) que nos permitan abordar simultáneamente distintos temas metodológicos importantes como la concentración espacial ( clustering), no linealidades y sobre-dispersión. Este modelo es aplicado al estudio de determinantes de localización de nuevas inversiones de tipo greenfield internas ( inward greenfield investments) que se dieron entre 2003 y 2007, en 249 regiones europeas. Luego de presentar el conjunto de datos y de mostrar la presencia de sobre-dispersión y agrupación (concentración) espacial, examinamos el marco teórico que motiva los determinantes de localización incluidos en el modelo empírico, y resaltamos algunas de las razones por las que las relaciones entre ciertas co-variables y la variable dependiente podrían ser no lineales. La sección subsiguiente comienza con descripción de las soluciones propuestas por la literatura anterior para abordar la concentración espacial, no linealidades, y sobre-dispersión, para luego presentar el Geo-NB-GAM. El análisis empírico muestra el buen desempeño del Geo-NB-GAM. Particularmente, la inclusión del componente geo-aditivo (una superficie de tendencia espacial suavizada) nos permite controlar heterogeneidades espaciales no observadas que inducen a la concentración espacial. Al permitir no linealidades se revela -continuando con las predicciones teóricas- que el efecto positivo de las economías de aglomeración se desvanece a medida que la densidad de las actividades económicas alcanza un umbral de valor. Sin embargo, sin importar cuán densa llegue a ser la actividad económica, nuestros resultados sugieren que los costes de congestión nunca superan las externalidades de aglomeración positivas. 本文提出了一种应用于区域统计数据的负二项式地理加性模型，它能够同时处理包括空间聚类、非线性和过度离散等多种重要的方法论问题。将该模型应用于2003-2007年的249个欧洲案例区，探讨其内部绿地投资的区位因子。在揭示了数据集样本分布具有过度离散与空间聚类特征后，我们对所构建的关于区位驱动因子的实证模型进行了核查，以确定是否遗漏重要变量，并高亮显示为何有些变量与因变量的关系可能是非线性的。本文后续部分首先描述了已有文献在解决空间聚类、非线性与过度离散等情景下的解决方案，并简要介绍了本文的Geo-NB-GAM模型。实证分析表明，该模型具有良好的模拟效果，尤其是地理加性成分（一种平滑的空间趋势面）在处理包括空间聚类在内的未被关注的空间异质性。非线性模型揭示出集聚经济的正向效应，随着经济活动密度阈值呈衰减趋势，这一点和理论预测是一致的。然而，本文结果显示无论经济活动的密度呈现何种变化，正向集聚的外部效应仍大于拥挤成本。. [ABSTRACT FROM AUTHOR]