Location Clusters, FDI and Local Entrepreneurs: Consistent Public Policy

摘要: In order to formulate public policy consistent with attracting foreign investment and fostering regional development, this paper analyzes a model of local entrepreneur’s choices when they are affected by direct (FDI) spillovers. FDI is determined economies agglomeration, market size, taxes, labor, location costs. It shown that costs the multinationals (MNE) affect optimal quantity MNE capital while preferences entrepreneurs only their consumption. Other determinants also impact development. The main policies advocated as follows: provision logistical infrastructure; creation and/or nurturing pro-market institutions; non-discretionary policies; reduction statutory tax rate; incentives universities research centers.