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

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  • Helen Simpson

    ()
    (CMPO University of Bristol, IFS and Oxford University Centre for Business Taxation)

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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Bibliographic 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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Keywords: multinational enterprises; skills; globalisation;

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References

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  2. Holger G�rg & Eric Strobl, 2003. ""Footloose" Multinationals?," Manchester School, University of Manchester, vol. 71(1), pages 1-19, January.
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  4. Disney, Richard F & Haskel, Jonathan & Heden, Ylva, 2000. "Restructuring And Productivity Growth In UK Manufacturing," CEPR Discussion Papers 2463, C.E.P.R. Discussion Papers.
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  7. Rachel Griffith & Stephen Redding & Helen Simpson, 2004. "Foreign Ownership and Productivity: New Evidence from the Service Sector and the R&D Lab," Oxford Review of Economic Policy, Oxford University Press, vol. 20(3), pages 440-456, Autumn.
  8. Yeaple, Stephen & Helpman, Elhanan & Melitz, Marc, 2004. "Export versus FDI with Heterogeneous Firms," Scholarly Articles 3229098, Harvard University Department of Economics.
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  14. WHALLEY, John & XIN, Xian, 2010. "China's FDI and non-FDI economies and the sustainability of future high Chinese growth," China Economic Review, Elsevier, vol. 21(1), pages 123-135, March.
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  16. Lee Branstetter & Nicholas Lardy, 2006. "China's Embrace of Globalization," NBER Working Papers 12373, National Bureau of Economic Research, Inc.
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  18. repec:hrv:faseco:4784029 is not listed on IDEAS
  19. Dunne, Timothy & Roberts, Mark J & Samuelson, Larry, 1989. "The Growth and Failure of U.S. Manufacturing Plants," The Quarterly Journal of Economics, MIT Press, vol. 104(4), pages 671-98, November.
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  24. Braconier, Henrik & Ekholm, Karolina, 1999. "Swedish Multinationals and Competition from High- and Low-Wage Locations," Working Paper Series 523, Research Institute of Industrial Economics.
  25. Richard Disney & Jonathan Haskel & Ylva Heden, 2003. "Entry, Exit and Establishment Survival in UK Manufacturing," Journal of Industrial Economics, Wiley Blackwell, vol. 51(1), pages 91-112, 03.
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Citations

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Cited by:
  1. Johannes Becker, 2009. "Taxation of Foreign Profits with Heterogeneous Multinational Firms," CESifo Working Paper Series 2899, CESifo Group Munich.
  2. Richard Kneller & Danny McGowan & Tomohiko Inui & Toshiyuki Matsuura, 2012. "Closure within multi-plant firms: evidence from Japan," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 148(4), pages 647-668, December.
  3. Johannes Becker & Clemens Fuest, 2011. "The taxation of foreign profits — The old view, the new view and a pragmatic view," Intereconomics: Review of European Economic Policy, Springer, vol. 46(2), pages 92-97, March.

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