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Investment abroad and adjustment at home: evidence from UK multinational firms

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Author Info
Helen Simpson () (CMPO University of Bristol, IFS and Oxford University Centre for Business Taxation)

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Abstract

This paper provides new evidence on the effects of overseas FDI on the skill-mix of multinational firms’ home-country operations. The analysis exploits China’s WTO accession to identify the impact of outward investment into a low-wage economy, and uses plant-level data to investigate changes in industrial structure within firms driven by plant closures. As predicted by models of vertical FDI the paper demonstrates that overseas investment in low-wage economies is associated with asymmetric effects on workers in low and high-skill industries in the home economy, and in particular with firms closing down plants in low-skill industries.

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File URL: http://www.sbs.ox.ac.uk/centres/tax/Documents/working_papers/WP0903.pdf
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Publisher Info
Paper provided by Oxford University Centre for Business Taxation in its series Working Papers with number 0903.

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Date of creation: 2009
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Handle: RePEc:btx:wpaper:0903

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Related research
Keywords: multinational enterprises; skills; globalisation;

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Find related papers by JEL classification:
F2 - International Economics - - International Factor Movements and International Business

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