The determinants of inward foreign direct investment: Evidence from the European regions

The aim of this paper is to study the determinants of FDI in the 260 EU NUTS2 regions between 2000 and 2006. After reviewing the relevant literature and the major traits of the FDI regional distribution in the EU, we analyse its drivers. First, we specify the model and perform a factor analysis to reduce the vast number of potential determinants to a manageable size. Afterwards, we estimate a reduced version of the model with the extracted...