GEP Research Paper 00/16
Are There Regional Spillovers from FDI in the UK?
Sourafel Girma and Katharine Wakelin
This paper was subsequently published in Trade, Investment and Labour: Proceedings of IEA Conference on Globalisation and Labour Markets, D. Greenaway, R. Upward and K. Wakelin (eds.), Palgrave (2002).
Abstract
This paper examines whether spillovers from foreign to domestic firms occur at the level of the region. We estimate the total factor productivity of domestic firms in the UK, including indicators for the level of FDI in the region and sector; in the sector but outside the region; and in the region but outside the sector. In addition, we also check to see if the characteristics of the firm and sector influence the level of spillovers from foreign firms. We conclude that domestic firms gain from the presence of multinational firms in the same sector and region, but loose out if the firms are located in a different region but the same sector. The characteristics of the region and sector also influence the level of spillovers. Less-developed regions gain less from spillovers than other regions, sectors with high levels of competition gain more, and sectors with a low technology gap between foreign and domestic firms experience higher spillovers.
Issued in September 2000.
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