Export Oriented FDI

University of Nottingham Research Paper No. 2004/35

32 Pages Posted: 2 Aug 2005

See all articles by Richard Kneller

Richard Kneller

University of Nottingham

Mauro Pisu

OECD; Leverhulme Centre for Research on Globalisation and Economic Policy; National Bank of Belgium

Abstract

It is well known that the performance of foreign firms compared to domestic companies is superior with respect to employment, wages, and productivity. In this paper we detail the export behaviour of foreign affiliates in the United Kingdom relative to indigenous firms. Our findings show that foreign firms are more likely to export, and when they do so they are more export intensive and overall contribute disproportionately to total manufacturing exports from the UK. While firm-level advantages explain some of these differences in export behaviour, strategic considerations dominate, where these include the differential in costs, productivity, and market size between the UK and foreign countries. That is, both horizontal and vertical motives can be found for the use of the UK as an export platform by foreign firms.

Keywords: Export platform, foreign direct investment, productivity

JEL Classification: F23, F15

Suggested Citation

Kneller, Richard and Pisu, Mauro, Export Oriented FDI. Available at SSRN: https://ssrn.com/abstract=764285 or http://dx.doi.org/10.2139/ssrn.764285

Richard Kneller (Contact Author)

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom

Mauro Pisu

OECD ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

Leverhulme Centre for Research on Globalisation and Economic Policy ( email )

University of Nottingham
School of Economics
Nottingham, NG7 2RD
United Kingdom

National Bank of Belgium ( email )

Research Department
Boulevard de Berlaimont 14
Brussels, 1000
Belgium

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