Regional Foreign Direct Investment and Wage Spillovers: Plant Level Evidence from the UK Electronics Industry

22 Pages Posted: 11 Jul 2003

See all articles by Nigel L. Driffield

Nigel L. Driffield

Aston University - Aston Business School

Sourafel Girma

Nottingham University Business School

Abstract

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.

Suggested Citation

Driffield, Nigel L. and Girma, Sourafel, Regional Foreign Direct Investment and Wage Spillovers: Plant Level Evidence from the UK Electronics Industry. Oxford Bulletin of Economics and Statistics, Vol. 65, pp. 453-474, September 2003. Available at SSRN: https://ssrn.com/abstract=423647

Nigel L. Driffield (Contact Author)

Aston University - Aston Business School ( email )

Aston Triangle
Birmingham, B47ET
United Kingdom

HOME PAGE: http://www.abs.aston.ac.uk/newweb/staff/Default.asp#E&S

Sourafel Girma

Nottingham University Business School ( email )

Jubilee Campus
Nottingham, NG8 1BB
United Kingdom
+44 0 115 8466656 (Phone)

HOME PAGE: http://www.nottingham.ac.uk/~lizsmg/

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