Regional and sectoral foreign direct investment in Portugal since joining the European union: a dynamic portrait

Abstract

type="main" xml:lang="en"> 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.