Regional healthcare infrastructure disparities and foreign direct investment into Europe

Abstract

This study examines the impact of sub-national healthcare infrastructure heterogeneity on the location choice of inward foreign direct investment (FDI). We do so by employing an augmented gravity model on Japanese firm-level FDI into European NUTS-2 regions during 2000-2019. Differences in each region's per capita number of hospital beds and practicing physicians highlight healthcare infrastructure heterogeneity across Europe. Negative binomial estimation results indicate that both hospital beds and practicing physicians significantly positively attract inward FDI, with physician density having the more significant impact. The findings are consistent with the hypothesis that local institutional quality is a determinant of FDI attraction.