GEP Research Paper 01/11
Regional Underdevelopment: is FDI the Solution? A Semi-parametric Analysis
Sourafel Girma and Katharine Wakelin
Abstract
In this paper we aim to examine the regional impact of foreign-owned establishments on the performance of domestic establishments in the electronics sector in the UK. We use establishment-level data taken from the UK Census of Production (the ARD) and introduce a semiparametric approach that deals with selectivity and endogeneity in the production function. The results indicate that positive spillovers exist but are mostly confined to the region in which the MNE locates. A number of characteristics influence their level, they are higher from non-US firms (in particular Japanese firms) and in more-developed regions.
Issued in May 2001.
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