Regional policy and spillovers from FDI in the UK


This paper tests one of the fundamental assumptions of regional policy makers over the last 20 years. Western governments, in seeking to attract internationally mobile capital have spent significant sums of public money on subsidies and grants. This is justified on the basis that the social returns to FDI are significantly greater than the private returns, due to productivity or technology spillovers from inward investors to domestic industry. However, this paper generates some estimates of these spillovers for both assisted areas and non-assisted areas in the UK, and questions the size of these social returns, arguing that productivity spillovers do not occur in regions where significant inward investment incentives are available.

Publication DOI:
Divisions: College of Business and Social Sciences > Aston Business School > Economics, Finance & Entrepreneurship
College of Business and Social Sciences > Aston Business School > Aston India Foundation for Applied Research
Additional Information: The original publication is available at
Uncontrolled Keywords: regional policy makers,internationally mobile capital,public money,subsidies,grants,social returns,private returns,spillovers,inward investors,domestic industry
Publication ISSN: 1432-0592
Last Modified: 12 Jun 2024 07:07
Date Deposited: 13 Oct 2009 15:00
Full Text Link:
Related URLs: http://www.scop ... tnerID=8YFLogxK (Scopus URL)
http://www.spri ... r7568154810611/ (Publisher URL)
PURE Output Type: Article
Published Date: 2004-12
Authors: Driffield, Nigel (ORCID Profile 0000-0003-1056-3117)



Version: Accepted Version

Export / Share Citation


Additional statistics for this record