Abstract
Despite few studies regarding foreign direct investment (FDI) in Portugal – especially regarding its effects – FDI can be an important catalyst for regional economic development and growth. This work studies existing FDI in the Portuguese regions, analyzing its distribution by Nomenclature of Territorial Units for Statistics III, the sectors in which FDI has more weight in each region, and its evolution from 1986–2009. Although the relative weight of FDI firms in Portugal remained constant over the years analyzed (around 1%), at the same time these firms spread to all regions of the country, not only concentrating in Lisboa and Porto, the main economic and service agglomerations. Regions attracted FDI not only in specialized sectors, but also for other activities, diversifying the regional productive structure of the country. The increase and diversification of FDI coincided with the tertiarization of the economy, being closer to the productive specialization pattern of the country, while continuing to focus mainly on manufacturing.
Highlights
The financial and economic crisis that Portugal is currently undergoing, felt more acutely since the international rescue package is in place, has prompted a heated discussion about the structural problems of the Portuguese economy
Before using a more refined analysis based on the three methods mentioned above, we draw a first picture of Foreign Direct Investment (FDI) in 1986, 1998, and 2009, comparing it to all companies operating in Portugal in those years and with foreign investment which first appeared in 1998 and 2009, which we designate by Recent FDI
The primary activities - such as agriculture, fisheries, and natural resource extraction - are those with a pattern of FDI location furthest from the total of the Portuguese economy, with total foreign investment in these activities being located in regions that generally have a low level of attraction of foreign capital, as the Alentejo or the interior north of Portugal
Summary
The financial and economic crisis that Portugal is currently undergoing, felt more acutely since the international rescue package is in place, has prompted a heated discussion about the structural problems of the Portuguese economy. Foreign Direct Investment (FDI) has gained strength in discussions aimed at redefining the route of the Portuguese economy, being presented as a variable that can contribute decisively to improve its performance. Previous literature about regional FDI in Portugal is almost inexistent and they are mainly aimed to draw conclusions about possible spillover effects that foreign companies can have on domestic ones In a study for the Portuguese manufacturing industry between 1982 and 1992, Figueiredo and Guimarães (1997) used the database Quadros do Pessoal (using labour as the variable of analysis) to analyse and describe, at the regional level, the presence of FDI in the Portuguese economy from 1982 until 1992. Our work is intended as a contribution to the analysis of regional FDI in Portugal following the pioneering study of Figueiredo and Guimarães (1997).
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