View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. Investment promotion
4 April, 2022updated 20 Apr 2022 09:24

IPAs aid levelling up across Europe

A new report suggests that investment promotion agencies are key to levelling up less-developed regions in Europe.

By Marina Leiva

New research shows that investment promotion agencies (IPAs) are having a strong positive impact on foreign direct investment (FDI) flows in Europe, and have been essential to levelling up less-developed regions.

Free Whitepaper
img

Why tech innovators and start-ups thrive in Brabant

Brabant is one of the most innovative regions in Europe, where high-tech industries meet advanced manufacturing and technological innovations happen frequently. Collaborations between businesses, government and academia create an environment where innovation thrives. Projects include everything from battery storage, emission-free cars and electric flights to robotics and AI, and the future of processing chips. Home to 2.5 million people and best-in-class physical and telecoms infrastructure, Brabant has become one of the world’s most competitive economies. This whitepaper provides a detailed analysis of what makes a globally competitive economy, from bright talent to robust value chains. It presents an insight into Brabant’s high-tech systems and materials sector, and the spirit of collaboration driving world-class innovation. Download to learn about the business-friendly environment, industrial and knowledge networks and geographical advantages that make Brabant the ideal destination for ambitious innovators and start-ups.
by Brabant
Enter your details here to receive your free Whitepaper.

A report titled FDI inflows in Europe: Does investment promotion work? argues that FDI is influenced by IPAs even in advanced economies, and that IPAs focused on less-developed regions increased FDI flows by up to 71%.

The report was written by Riccardo Crescenzi of the London School of Economics and Political Science, Marco Di Cataldo of Ca’ Foscari University of Venice, and Mara Giua of Roma Tre University. Their research was based on surveys of national and sub-national IPAs in Europe while applying policy valuation methods to estimate the impacts of IPAs on FDI attraction

In their analysis, sub-national IPAs contribute to increasing inflows of foreign investment “at the extensive margin – i.e. raising the probability of receiving FDI – and at the intensive margin – boosting the amount of total foreign investment received as well as jobs directly created by the investment”. 

Their research shows that sub-national IPAs working in close proximity to investors are particularly successful at attracting FDI to areas “where market and institutional failures are stronger”. 

IPAs in Europe influence FDI “over and above other policies targeting the general economic improvement of the host economies”, the report states, in particular in knowledge-intensive sectors “where collaborative systemic conditions are more relevant”. 

The report also shows that “smaller ‘occasional’ investors” are more likely to benefit from the services IPAs provide, while investors from within the EU Single Market benefit as much from IPAs as non-EU investors, supporting the idea “that even after removing most informational and legal barriers to capital mobility, localised market (e.g. for suppliers or suitably trained workers) and institutional failures remain a binding constraint successfully addressed by regional IPAs”. 

The paper suggests that having dedicated IPAs in less-developed regions “may be a viable policy option to improve their attractiveness to foreign investors, and, possibly, to stimulate their economic development”. 

The report findings suggest that the investment attractiveness of less-advanced economies is “conditioned not only upon their capacity to address information asymmetries in capital markets but also on the implementation of appropriate actions to address localised market and institutional failures”. 

Free Whitepaper
img

Why tech innovators and start-ups thrive in Brabant

Brabant is one of the most innovative regions in Europe, where high-tech industries meet advanced manufacturing and technological innovations happen frequently. Collaborations between businesses, government and academia create an environment where innovation thrives. Projects include everything from battery storage, emission-free cars and electric flights to robotics and AI, and the future of processing chips. Home to 2.5 million people and best-in-class physical and telecoms infrastructure, Brabant has become one of the world’s most competitive economies. This whitepaper provides a detailed analysis of what makes a globally competitive economy, from bright talent to robust value chains. It presents an insight into Brabant’s high-tech systems and materials sector, and the spirit of collaboration driving world-class innovation. Download to learn about the business-friendly environment, industrial and knowledge networks and geographical advantages that make Brabant the ideal destination for ambitious innovators and start-ups.
by Brabant
Enter your details here to receive your free Whitepaper.

Topics in this article:
NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. Data, analysis and deep insights on foreign direct investment delivered to you
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to Investment Monitor