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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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  • Helen Simpson, 2012. "How do Firms’ Outward FDI Strategies Relate to their Activity at Home? Empirical Evidence for the UK," The World Economy, Wiley Blackwell, vol. 35(3), pages 243-272, March.
  • Handle: RePEc:bla:worlde:v:35:y:2012:i:3:p:243-272 DOI: j.1467-9701.2011.01402.x
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    File URL: http://hdl.handle.net/10.1111/j.1467-9701.2011.01402.x
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    Cited by:

    1. Crescenzi, Riccardo & Gagliardi, Luisa & Iammarino, Simona, 2015. "Foreign multinationals and domestic innovation: Intra-industry effects and firm heterogeneity," Research Policy, Elsevier, vol. 44(3), pages 596-609.
    2. Becker, Johannes & Riedel, Nadine, 2013. "Multinational firms mitigate tax competition," Economics Letters, Elsevier, vol. 118(2), pages 404-406.
    3. Bernhard Dachs & Bernd Ebersberger & Steffen Kinkel & Oliver Som, 2015. "The effects of production offshoring on R&D and innovation in the home country," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(1), pages 9-31, March.

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    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business

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