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How do Firms’ Outward FDI Strategies Relate to their Activity at Home? Empirical Evidence for the UK

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  • Helen Simpson

Abstract

This paper investigates the structure of firms’ outward FDI and their behaviour at home in both manufacturing and business services sectors. UK multinationals with overseas affiliates in low-wage economies invest simultaneously in a large number of high-wage countries. I find that more productive multinationals operate in a greater number of countries, consistent with their being able to bear the fixed costs of investing in numerous locations abroad. UK manufacturing plants owned by large-scale, low-wage economy outward investors display lower domestic employment growth, in particular in low-skill activities, consistent with low-wage economy labour substituting for low-skill labour in the UK.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal The World Economy.

Volume (Year): 35 (2012)
Issue (Month): 3 (03)
Pages: 243-272

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Handle: RePEc:bla:worlde:v:35:y:2012:i:3:p:243-272

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Cited by:
  1. Bernhard Dachs & Bernd Ebersberger, 2013. "The Effects of Production Offshoring on R&D and Innovation in the Home Country," FIW Research Reports series V-001, FIW.
  2. Becker, Johannes & Riedel, Nadine, 2013. "Multinational firms mitigate tax competition," Economics Letters, Elsevier, vol. 118(2), pages 404-406.

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