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Inward investment, transaction linkages and productivity spillovers *
Author(s) -
Driffield Nigel,
Munday Max,
Roberts Annette
Publication year - 2004
Publication title -
papers in regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.937
H-Index - 64
eISSN - 1435-5957
pISSN - 1056-8190
DOI - 10.1111/j.1435-5597.2004.tb01934.x
Subject(s) - externality , foreign direct investment , productivity , manufacturing sector , transaction cost , business , manufacturing , investment (military) , industrial organization , international economics , economics , international trade , microeconomics , macroeconomics , marketing , finance , politics , political science , law
. The article examines the extent to which foreign manufacturing firms in the UK promote productivity growth in the domestically owned manufacturing sector through their buying and supplying relationships. Evidence for intra‐and inter‐regional externalities from the presence of foreign manufacturing, and intra‐ and inter‐industry effects is brought to light. Externalities in the domestic sector are most noticeable where foreign manufacturing sells to domestic manufacturing. These externalities are, however, not wholly robust to different specifications of spatial dependence. The findings are positioned in a debate, which has tended to view backward (as opposed to forward) linkages from multinationals to domestically owned supply bases as a critical driver of indirect economic benefits.