Abstract

http://ssrn.com/abstract=962848
 
 

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The Impact of Foreign Direct Investment on New Firm Survival in the UK: Evidence for Static v. Dynamic Industries


Andrew E. Burke


Cranfield University - School of Management

Holger Gorg


Kiel Institute for the World Economy; Institute for the Study of Labor (IZA)

Aoife Hanley


Nottingham University Business School (NUBS) - Industrial Economics Division

February 2007

University of Nottingham Research Paper No. 2007/09

Abstract:     
The paper examines the impact of Foreign Direct Investment (FDI) on the survival of business start-ups. FDI has potential for both negative displacement/competition effects as well as positive knowledge spillover and linkage effects on new ventures. We find a net positive effect for the whole dataset. However, a major contribution of the paper is to outline and test an argument that this effect is likely to be comprised of a net negative effect in dynamic industries (high churn: firm entry plus exit relative to the stock of firms) alongside a net positive effect in static (low churn) industries. We find evidence to support this view. The results identify new effects of globalisation on enterprise development with associated challenges for industrial policy.

Number of Pages in PDF File: 32

Keywords: new firms, foreign direct investment, dynamic industries

JEL Classification: F20, L11, L25, M13

working papers series


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Date posted: February 13, 2007  

Suggested Citation

Burke, Andrew E. and Gorg, Holger and Hanley, Aoife, The Impact of Foreign Direct Investment on New Firm Survival in the UK: Evidence for Static v. Dynamic Industries (February 2007). Available at SSRN: http://ssrn.com/abstract=962848 or http://dx.doi.org/10.2139/ssrn.962848

Contact Information

Andrew E. Burke (Contact Author)
Cranfield University - School of Management ( email )
Bedfordshire, MK43 0AL
United Kingdom
HOME PAGE: http://www.som.cranfield.ac.uk/som/faculty/Showfaculty.asp?link=420
Holger Görg
Kiel Institute for the World Economy ( email )
P.O. Box 4309
Kiel, D-24100
Germany
Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072
Germany
Aoife Hanley
Nottingham University Business School (NUBS) - Industrial Economics Division ( email )
Jubilee Campus
Wollaton Road
Nottingham, NG8 1BB
United Kingdom
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