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Productivity Impacts and Spillovers from Foreign Ownership in the United Kingdom

Published online by Cambridge University Press:  26 March 2020

Richard Harris  and
Catherine Robinson
Richard Harris
Affiliation:
University of Newcastle upon Tyne
Catherine Robinson*
Affiliation:
National Institute of Economic and Social Research
*
e-mail: [email protected]
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Abstract

In this paper, we measure the indirect impact of FDI on the total factor productivity of domestic plants in a number of UK manufacturing industries, 1974–95, using a standard production-function-based approach. We use data from the UK ARD and information derived from UK input-output tables. Our results indicate that the competition and ‘absorption capacity’ effect at times outweighs potential benefits, leading to negative spillovers. We also find that inter-industry spillovers are generally more prevalent than intra-industry spillovers. We conclude that the nature of spillovers is such that measurement techniques traditionally adopted fail to explain adequately their complex and diverse nature.

Type
Articles
Information
National Institute Economic Review , Volume 187 , January 2004 , pp. 58 - 75
Copyright
Copyright © 2004 National Institute of Economic and Social Research

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Footnotes

Support from the Leverhulme Trust (grant F/00678A) is gratefully acknowledged. We would also like to thank the Office for National Statistics for permission to use the Annual Respondents Database (ARD). We are grateful also to referees, for valuable comments on an earlier draft of this paper.

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