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Explaining employment changes in foreign manufacturing investment in the UK

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  • Williams, David

Abstract

This article tests the view that the impact which foreign direct investment (FDI) has upon employment within the host economy will vary according to the entry mode which the multinational enterprise (MNE) chooses, the type of subsidiary and the nationality of the parent organisation which is established in the regional economy. Data were collected from the subsidiaries of foreign-owned firms in the UK. A model was devised and tested with estimations using this data. The results provide support for the view that the impact of FDI may be differentiated by entry mode, nationality and subsidiary type. Specifically, firms which entered by way of greenfield investment created positive employment effects as compared to those which entered by means of a merger or acquisition where the effects were relatively negative. There is some evidence that impact is also ownership specific. Finally, those subsidiaries which performed more value-added functions had a positive effect on employment.

Suggested Citation

  • Williams, David, 2003. "Explaining employment changes in foreign manufacturing investment in the UK," International Business Review, Elsevier, vol. 12(4), pages 479-497, August.
    • Handle: RePEc:eee:iburev:v:12:y:2003:i:4:p:479-497
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    Cited by:

    1. Martin Falk, 2016. "Austria 2025 – Corporate Investment in Austria. Stylised Facts, Impacts, Determinants and Investment Policies," WIFO Studies, WIFO, number 59183.
    2. Frank McDonald & Heinz-Josef Tüselmann & Svitlana Voronkova & Pavlos Dimitratos, 2005. "The Strategic Development of Foreign-Owned Subsidiaries and Direct Employment in Host Locations in the United Kingdom," Environment and Planning C, , vol. 23(6), pages 867-882, December.
    3. Piers Thompson & Wenyu Zang, 2022. "A matter of life and death? Knowledge intensity of FDI activities and domestic enterprise," Papers in Regional Science, Wiley Blackwell, vol. 101(5), pages 1157-1179, October.
    4. Geoffrey G. Gachino, 2010. "Technological spillovers from multinational presence," Progress in Development Studies, , vol. 10(3), pages 193-210, July.
    5. Fabienne Fortanier & Selwyn Moons, 2011. "Foreign Investors in The Netherlands: Heterogeneous Employment and Productivity Effects," De Economist, Springer, vol. 159(4), pages 511-531, December.

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