The article examines how things like businesses clustering in certain areas affect where companies from other countries choose to set up their manufacturing operations. It found that these clustering effects, known as agglomeration economies, are significant factors influencing where foreign manufacturing investments go. These factors vary depending on the type of industry, with linkages between different industries and levels of research and development being key factors. In industries with strong connections between different types of businesses and those that require a lot of research and development, these clustering effects are especially important in determining where foreign manufacturing investments end up.