Distance related variables typically vary in a cross-section dimension but less so in a time dimension across cities, regions, or countries. The enlargement of the EU or the introduction of the euro, however, can be looked upon as integration shocks that are informative of the consequences of...

A key issue in development economics is the explanation of core-periphery patterns around the world. Combining this issue with that of analyzing unilateral transfers (e.g. foreign aid) points in the direction of the use of New Economic Geography (NEG) models which, so far, has not been done...

Most FDI takes place between the developed countries, which suggests that the market-seeking motive is important for understanding FDI. However, given the stylized fact that trade barriers (e.g. transportation costs and financial barriers) have declined over the past 20 years, models that aim to...

The research on the location choice for Foreign Direct Investment (FDI) is traditionally restricted to a choice between countries. The within-country location choice is less prominent in the literature. If within-country location decisions are considered it is mostly limited to Greenfield...

Using a rich data set on the EU regions, we analyze the relevance of two possible determinants of a region's resilience to shocks, the degree of urbanization and specialization. We take the Great Recession, the economic and financial crisis that started in 2008, as our shock and then analyze how...

In explaining the uneven spatial distribution of economic activity, urban economics and new economic geography (NEG) dominate recent research in economics. A main difference between these two approaches is that NEG stresses the role of spatial linkages whereas urban economics does not do so. We...

Using a detailed and large data set on cross-border merger and acquisitions we discuss the relationship between theory and observed empirical characteristics: (i) most FDI is in the form of M&As, (ii) firms engaged in M&As seem to be 'market-seeking', (iii) M&As come in waves (the most recent...

In contrast to empirical evidence, recent theories of cross-border mergers and acquisitions (M&As) assume perfect knowledge transfers – from high to low productivity firms – between acquirer and target. Using the Melitz (2003) model of heterogeneous firms, we develop a matching model of...

The research on the location choice for Foreign Direct Investment (FDI) is traditionally restricted to a choice between countries. The within-country location choice is less prominent in the literature. If within-country location decisions are considered it is mostly limited to Greenfield...

Using a rich data set on the EU regions, we analyze the relevance of two possible determinants of a region’s resilience to shocks, the degree of urbanization and specialization. We take the Great Recession, the economic and financial crisis that started in 2008, as our shock and then analyze...