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Regional Foreign Direct Investment and Wage Spillovers: Plant Level Evidence from the UK Electronics Industry *
Author(s) -
Driffield Nigel,
Girma Sourafel
Publication year - 2003
Publication title -
oxford bulletin of economics and statistics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.131
H-Index - 73
eISSN - 1468-0084
pISSN - 0305-9049
DOI - 10.1111/1468-0084.t01-1-00057
Subject(s) - foreign direct investment , wage , economics , panel data , investment (military) , labour economics , manufacturing sector , inward investment , international economics , manufacturing , business , macroeconomics , politics , political science , law , econometrics , marketing
This paper examines the extent to which foreign investment in the UK generates wage spillovers in the domestic sector of the economy using a simultaneous dynamic panel data model and focusing on the electronics sector, possibly the most ‘globalized’ sector of UK manufacturing. It finds evidence that the higher wages paid by foreign firms cause wages in the domestic sector to be bid up. This phenomenon is, however, largely confined to the region where foreign direct investment takes place.