REGIONAL INCENTIVES AND THE QUALITY OF MOBILE INVESTMENT IN THE LESS FAVORED REGIONS OF THE EC

The renewal of interest in the development potential of inward investm ent within the less favoured regions (LFRs) has been the outcome of di senchantment with strategies based on small firm entrepreneurship. How ever, it is also the product of changing analysis of the positive cont ribution to regional development from new organisational tendencies in large firms, notably the decentralisation of decision-making and prod uction. This study, based on research commissioned by the Regional Pol icy Directorate of the European Commission, critically evaluates the l atter proposition, and explores the regional policy requirements for a ttracting and rooting high quality investment in the less favoured reg ions of the European Community. It reviews new theorisations of large firm behaviour, to draw out the locational and policy requirements of so-called quality investment in the context of LFRs. It goes on to exa mine whether the 1980s have witnessed a change in the nature and quali ty of mobile investment in LFRs, through a study of major projects in selected EC regions. The study concludes that the recent experience of LFRs challenges the text-book analysis of the emerging decentralised corporation. To the extent that evidence of upgrading was discovered, this tended to reflect innovative policy efforts at the regional level , rather than changing corporate practices. It ends with an outline of the EC regional policy reforms and local institutional improvements n eeded to secure locally embedded projects in Europe's LFRs.