An industry whose location is not influenced strongly by access either to materials or markets, and which can therefore operate within a very wide range of locations. Any form of ‘direct line’ business, operated almost entirely through telephone and fax lines, would be an example; see T. Friedman (2005) and J. R. Bryson and P. W. Daniels (2004). Such industries are also liberated from locational constraints by footloose capital.

Stichele and de Haan (2007) SOMO, look at the consequences of investment in garment making—a classic footloose industry. The negative impacts they detail include the problems of companies leaving the African countries where they temporarily had a presence. ‘This creates ever more desperate attempts by countries to keep the investors, in an industry that has already cost countries too much, by offering better incentives. For instance, a company…was able to use the desperation of…Uganda for foreign investment to get the government to provide and invest in buildings and infrastructure, secure loans and credit facilities. The company left the country without repaying any of its debts, leaving behind a destitute workforce that did not even have enough money left to pay the bus fare home. And this happened after the company had already abandoned factories in Tanzania and Kenya.’ This paper demands to be read.

Martin and Rogers (1995) J. Int. Econ. 39 developed the footloose capital model, with the basic assumptions that capital is mobile across regions, but moves without owners; the demand linkage is broken, as there is no market increase; the supply linkage is broken as the mobile factor responds to changes in nominal, not real, incomes; and that labour is mobile between sectors, but not across regions. A small selection of the many papers on this model includes Tafenau (2006) 25th SCORUS Conference; Dupont and Martin (2006) J. Econ. Geog. 6; and Toulemonde (2006) J. Urb. Econ. 59. R. Baldwin et al. (2003) evaluate this model.