Inward investment, transaction linkages and productivity spillovers

Nigel Driffield, Max Munday () and Annette Roberts

Economics of Governance, 2004, vol. 83, issue 4, 699-722

Abstract: The article examines the extent to which foreign manufacturing firms in the UK promote productivity growth in the domestically owned manufacturing sector through their buying and supplying relationships. Evidence for intra- and inter-regional externalities from the presence of foreign manufacturing, and intra- and inter-industry effects is brought to light. Externalities in the domestic sector are most noticeable where foreign manufacturing sells to domestic manufacturing. These externalities are, however, not wholly robust to different specifications of spatial dependence. The findings are positioned in a debate, which has tended to view backward (as opposed to forward) linkages from multinationals to domestically owned supply bases as a critical driver of indirect economic benefits. Copyright Springer-Verlag Berlin/Heidelberg 2004

Keywords: Productivity spillovers; foreign manufacturing; input-output tables; spatial dependence (search for similar items in EconPapers)
Date: 2004
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DOI: 10.1007/s10110-004-0224-0

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