Inward investment and technical progress in the United Kingdom manufacturing sector

Nigel Pain ()
Authors registered in the RePEc Author Service: George Kapetanios

No 175, National Institute of Economic and Social Research (NIESR) Discussion Papers from National Institute of Economic and Social Research

Abstract: This paper investigates the impact of inward 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 spilovers 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 much more important source of technical progress than foreign trade. We also find that the impact of inward investment varies according to the nationality of the investing firm.

Date: 2000-12
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:nsr:niesrd:175

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