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

  • Helen Simpson

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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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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