An Econometric Analysis of Foreign Direct Investment in the United Kingdom

Nigel Pain

Scottish Journal of Political Economy, 1993, vol. 40, issue 1, 1-23

Abstract: This paper constructs a theoretical model of the factors influencing both the location and the method of production chosen by multinational enterprises and examines the extent to which it can be used to explain aggregate foreign direct investment in the United Kingdom over the last two decades. The results suggest that market size, relative factor prices, and the nonproduction costs of trade have an important influence on the location of investment. The evidence presented is also consistent with the hypothesis that investment in the United Kingdom is viewed as offering access to a wider (tariff free) European market. Copyright 1993 by Scottish Economic Society.

Date: 1993
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Persistent link: https://EconPapers.repec.org/RePEc:bla:scotjp:v:40:y:1993:i:1:p:1-23

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