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Regional Foreign Direct Investment and Wage Spillovers: Plant Level Evidence from the UK Electronics Industry

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  • Nigel Driffield
  • Sourafel Girma

Abstract

This paper examines the extent to which foreign investment in the UK generates wage spillovers in the domestic sector of the economy using a simultaneous dynamic panel data model and focusing on the electronics sector, possibly the most ‘globalized’ sector of UK manufacturing. It finds evidence that the higher wages paid by foreign firms cause wages in the domestic sector to be bid up. This phenomenon is, however, largely confined to the region where foreign direct investment takes place.

Suggested Citation

  • Nigel Driffield & Sourafel Girma, 2003. "Regional Foreign Direct Investment and Wage Spillovers: Plant Level Evidence from the UK Electronics Industry," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 65(4), pages 453-474, September.
    • Handle: RePEc:bla:obuest:v:65:y:2003:i:4:p:453-474
    DOI: 10.1111/1468-0084.t01-1-00057
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