Technology flows, outsourcing and productivity:an analysis of UK trade and FDI

Driffield, Nigel L., Henry, Michael and Love, James H. (2007). Technology flows, outsourcing and productivity:an analysis of UK trade and FDI. Working Paper. Aston University.

Abstract

The literature on technology spillovers from trade and FDI is ambiguous in its findings. This may in part be because of the assumption in much of the work that trade and FDI flows are homogeneous in their determinants and thus in their effects. We develop a taxonomy of trade and FDI determinants based on R&D intensity and unit labour cost differentials, and test for the presence of spillovers from inward investment and imports on an extensive sample of UK manufacturing plants. We find that both trade and FDI have measurable spillover effects, but the sign and extent of these effects varies depending on the technological and factor cost differentials between the recipient and host economies. There is therefore an identifiable link between the determinants and effects of trade and FDI which the previous literature has not explored.

Divisions: Aston Business School > Economics finance & entrepreneurship
Aston Business School > Economics finance & entrepreneurship research group
Aston Business School
Additional Information: Aston Business School Research Papers are published by the Institute to bring the results of research in progress to a wider audience and to facilitate discussion. They will normally be published in a revised form subsequently and the agreement of the authors should be obtained before referring to its contents in other published works.
Published Date: 2007
Authors: Driffield, Nigel L.
Henry, Michael
Love, James H.

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Version: Accepted Version

License: Creative Commons Attribution


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