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Inward Investment and Technical Progress in the UK Manufacturing Sector

Author

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  • Florence Hubert
  • Nigel Pain

Abstract

This paper investigates the impact of direct investment by foreign-owned companies on technical progress and hence labour productivity in the UK manufacturing sector. Using an industry-level panel data set we find that foreign-owned firms have a significant positive effect on the level of technical efficiency in domestic firms. There is evidence of significant intra-industry and inter-industry spillovers from inward investment. These findings remain robust even when other factors such as imports and domestic R&D expenditures are allowed for. Inward investment appears to be a much more important source of technical progress than foreign trade ... Ce document étudie l’impact de l’investissement direct par des sociétés sous contrôle étranger sur le progrès technique et, par conséquent, la productivité du travail dans le secteur de l’industrie manufacturière du Royaume-Uni. En utilisant un ensemble de données sectorielles en panel, nous trouvons que les sociétés sous contrôle étranger ont un impact positif significatif sur le niveau d’efficacité technique dans les firmes nationales. Il y a des signes de retombées intraindustrielles et interindustrielles significatives consécutives aux investissements entrants. Ces résultats demeurent robustes même en tenant compte d’autres facteurs tels que les importations et les dépenses R-D nationales. Les investissements entrants semblent être une source plus importante de progrès technique que le commerce extérieur ...

Suggested Citation

  • Florence Hubert & Nigel Pain, 2000. "Inward Investment and Technical Progress in the UK Manufacturing Sector," OECD Economics Department Working Papers 268, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:268-en
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    File URL: http://dx.doi.org/10.1787/171541878788
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    Citations

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    Cited by:

    1. International Monetary Fund, 2004. "United Kingdom; Selected Issues," IMF Staff Country Reports 04/55, International Monetary Fund.
    2. Carlo Cottarelli & Julio Escolano, 2004. "Assessing the Assessment; A Critical Look At the June 2003 Assessment of the United Kingdom'S Five Tests for Euro Entry," IMF Working Papers 04/116, International Monetary Fund.
    3. J. Rosell-Martinez & P. Sanchez-Sellero, 2012. "Foreign direct investment and technical progress in Spanish manufacturing," Applied Economics, Taylor & Francis Journals, vol. 44(19), pages 2473-2489, July.
    4. Lucia Piscitello & Larissa Rabbiosi, 2005. "The impact of inward FDI on local companies' labour productivity: evidence from the Italian case," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 12(1), pages 35-51.
    5. Ray Barrell & Dirk Willem te Velde, 2000. "Catching-up of East German Labour Productivity in the 1990s," German Economic Review, Verein für Socialpolitik, vol. 1(3), pages 271-297, August.
    6. Rashmi Banga, 2007. "Liberalisation and Wage Inequality In India," Working Papers id:805, eSocialSciences.

    More about this item

    Keywords

    investissement étranger entrant; inward investment; multinational; multinationals; productivity; productivité; progrès technique; technical progress;

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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