The Impact on Domestic Productivity of Inward Investment in the Uk
نویسنده
چکیده
This paper examines one of the basic tenets of UK industrial policy, that attracting inward investment into the UK stimulates domestic productivity growth. A model of productivity growth is developed for the indigenous sector of UK manufacturing, linking domestic productivity growth to theoretical explanations of inward investment. The paper demonstrates that inward investment does stimulate productivity growth in the domestic sector of around 0.75% per annum. However, this cannot be attributed to investment or output spillovers, but as a result of the productivity advantage exhibited by the foreign firms. J.E.L. classification: O31, F23 keywords : productivity growth, inward investment. word count 6313 inclusive * I would like to express thanks to Mick Silver and two anonymous referees for helpful comments on a previous draft. Any remaining errors are of course mine.
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