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Inward Investment and Technical Progress in the UK Manufacturing Sector

Listed author(s):
  • Florence Hubert
  • Nigel Pain

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 ...

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Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 268.

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Date of creation: 12 Oct 2000
Handle: RePEc:oec:ecoaaa:268-en
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