The Distribution of Foreign Investment and Regional Policy

Review of Regional Research, Forthcoming

8 Pages Posted: 11 Jun 2005

See all articles by Udo Broll

Udo Broll

Dresden University of Technology - Faculty of Economics and Business Management

Sugata Marjit

Centre for Studies in Social Sciences, Calcutta; Indian Institute of Foreign Trade; City University of Hong Kong (CityU) - Department of Economics & Finance

Jack Wahl

University of Dortmund

Abstract

In this note economic integration is viewed as a situation where countries within a union coordinate their industrial policies. We demonstrate that greater regional policy coordination between countries may induce more specialization instead of the intended diversification in interregional allocations of foreign investment. Thus international capital flows tend to become more concentrated in an integrated economy. This is in contrast to the objectives of regional policy of the European union.

Keywords: Economic integration, foreign investment, regional policy, specialization, diversification

JEL Classification: F15

Suggested Citation

Broll, Udo and Marjit, Sugata and Marjit, Sugata and Wahl, Jack, The Distribution of Foreign Investment and Regional Policy. Review of Regional Research, Forthcoming, Available at SSRN: https://ssrn.com/abstract=740345

Udo Broll

Dresden University of Technology - Faculty of Economics and Business Management ( email )

Mommsenstrasse 13
Dresden, D-01062
Germany

Sugata Marjit

Centre for Studies in Social Sciences, Calcutta ( email )

R 1, B.P. Township
Kolkata, West Bengal, India
Kolkata, West Bengal 700094
India

Indian Institute of Foreign Trade ( email )

New Delhi
QUTUB INSTITUTIONAL AREA
NEW DELHI, 110016
India

City University of Hong Kong (CityU) - Department of Economics & Finance ( email )

83 Tat Chee Avenue
Kowloon
Hong Kong

Jack Wahl (Contact Author)

University of Dortmund ( email )

Dortmund, D-44221
Germany