Foreign direct investment in renewable energy: Trends, drivers and determinants

Innovation-related activities have undergone steady internationalization in recent years. Host economies now need to offer a favourable environment to companies in which to develop their innovation-related activities. This paper presents an econometric study of the locational criteria of innovation-related activities. The results show the importance of market size, agglomeration effects, and, to a lesser extent, the quality of public governance, to the location of international activities in innovation-related activities. The overall degree of a country’s openness to foreign direct investment also appears to be a significant locational determinant. The results give insights on the locational strategies of transnational corporations in various industries and across differing types of economy.