Inward Investment, Technological Change and Growth : The Impact of Multinational Corporations on the UK Economy

Original essays identify the channels through which inward investment can affect host economies and shape the size and structure of industrialized economies over the last decade. Leading experts in international investment and the behavior of national and multinational firms combine innovative methodologies and firm-level data to evaluate the impact of inward investment on such issues as productivity, technology, and innovation. They compare UK developments to those experienced by French, Italian, German and US economies. Most industrialised economies rely increasingly on knowledge-based activities. The processes of globalisation and European integration have simultaneously encouraged the growth of foreign direct investment, with multinational companies helping to transmit firm-specific technologies and ideas across national borders. Governments and local development agencies are engaged in fierce competition to attract inward investment in the belief that such investments offer wider benefits for host locations. In Inward Investment, Technological Change and Growth leading authors in the fields of international investment and the behaviour of national and multinational firms combine innovative methodologies and firm-level data to enable empirical evaluation of the impact of inward investment. The contributors identify the key channels through which inward investment might be expected to affect host economies and provide quantitative evidence on the comparative impact of multinational corporations on the size and industrial structure of the UK economy. The findings suggest that inward investment has made an important and significant contribution to economic growth in Britain over the past two decades. Foreign owned firms are found to have higher levels of productivity than domestics ones, and to have a growing impact on the level of innovation and export performance. Direct productivity spillovers and competition from inward investors are shown to have helped improve the performance of UK-owned firms, although the impact has varied by industry and region. These detailed studies of aspects of inward investment in the UK are put into context through a review of existing literature and by comparison of UK developments to those experienced by French, Italian, German and US economies. The empirical techniques used in the volume can readily be applied to other economies, and can be used both to evaluate the net benefits of inward investment and to help design appropriate policies and institutions to maximise the size of those benefits Cover......Page 1 Contents......Page 6 List of tables......Page 8 List of figures......Page 11 Notes on the contributors......Page 12 1 The growth and impact of inward investment in the UK: introduction and overview......Page 16 2 The determinants of host country spillovers from foreign direct investment: a review and synthesis of the literature......Page 49 3 Inward investment and technical progress in the UK......Page 81 4 Host country effects of FDI in the UK: recent evidence from firm data......Page 119 5 Why do foreign-owned firms in the UK have higher labour productivity?......Page 137 6 Regional policy and the impact of FDI in the UK......Page 177 7 A regional computable general equilibrium analysis of the demand and 'efficiency spillover' effects of foreig direct investment......Page 193 8 Sticky places in slippery space – the location of innovation by MNCs in the European regions......Page 225 9 Foreign trade and FDI stocks in British, US and French industries: complements or substitutes?......Page 255 Index......Page 280 The Growth And Impact Of Inward Investment In The Uk / Nigel Pain -- The Determinants Of Host Country Spillovers From Foreign Direct Investment / Magnus Blomström, Ari Kokko And Steven Globerman -- Inward Investment And Technical Progress In The Uk / Florence Hubert And Nigel Pain -- Host Country Effects Of Fdi In The Uk / Sourafel Girma [and Others] -- Why Do Foreign-owned Firms In The Uk Have Higher Labour Productivity? / Nicholas Oulton -- Regional Policy And The Impact Of Fdi In The Uk / Nigel Driffield -- A Regional Computable General Equilibrium Analysis Of The Demand And 'efficiency Spillover' Effects Of Foreign Direct Investment / Gary Gillespie [and Others] -- Sticky Places In Slippery Space / John Cantwell, Simona Iammarino And Camilla Noonan -- Foreign Trade And Fdi Stocks In British, Us And French Industries / Lionel Fontange ́and Michaël Pajot. Edited By Nigel Pain. Collection Of Papers Presented At A Conference Held At The British Academy In Sept. 1999. Includes Bibliographical References And Index. This collection of papers from the NIESR conference at the British Academy identifies the channels through which inward investment can affect host economies, and provides quantitative evidence on the extent to which inward investment has acted to shape the size and structure of industrialised economies over the last decade. Leading authors in the fields of international investment and the behaviour of national and multinational firms combine innovative methodologies and firm-level data to enable empirical evaluation of the impact of inward investment. Detailed studies of aspects of inward investment in the UK are put into context through a review of existing literature and by comparison of UK developments to those experienced by French, Italian, German and US economies. This collection of papers from the NIESR conference at the British Academy identifies the channels through which inward investment can affect host economies, and provides quantitative evidence on the extent to which inward investment has acted to shape the size and structure of industrialized economies over the last decade. Authors in the fields of international investment and the behaviour of national and multinational firms combine innovative methodologies and firm level data to enable empirical evaluation of the impact of inward investment. Detailed studies of aspects of inward investment in the UK are put into context through a review of existing literature and by comparison of UK developments to those experienced by French, Italian, German and US economies This text identifies the key channels through which inward investment might be expected to affect host economies. It combines methodologies and firm-level data to enable empirical ealuation of the impact of inward investment This volume contains a collection of papers from a conference held at the British Academy in September 1999.