Hostname: page-component-cd9895bd7-gbm5v Total loading time: 0 Render date: 2024-12-25T17:48:17.507Z Has data issue: false hasContentIssue false

The Growth of Foreign Direct Investment in Europe

Published online by Cambridge University Press:  26 March 2020

Extract

Increasing attention has been paid in Europe in recent years to the question of why firms invest abroad. This reflects both the rapid growth in foreign direct investment within Europe, along with recent improvements in the quality and availability of data. At the heart of the debate is a focus on the costs and benefits of foreign investment, such as whether inward investment affects employment and economic growth and whether outward investment is simply ‘job exporting‘, with firms moving to low-cost, labour-abundant locations. An understanding of the motives behind firms’ decisions to invest overseas is of particular importance for the UK, whose aggregate stocks of outward and inward foreign direct investment reached 30 per cent and 21 per cent of GDP respectively at the end of 1995.

Type
Articles
Copyright
Copyright © 1997 National Institute of Economic and Social Research

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Balasubramanyam, VN, Salisu, M. and Sapsford, D. (1996), ‘Foreign direct investment and growth in EP and IS Countries’, Economic Journal, vol. 106, pp. 92105.CrossRefGoogle Scholar
Baldwin, R., Forslid, R. and Haaland, J. (1995), ‘Investment creation and investment diversion: simulation analysis of the Single Market Programme’, CEPR Discussion Paper no.1308.Google Scholar
Barrell, R., Anderton, R., Lansbury, M. and Sefton, J. (1997), ‘FEERs for the NIEs: exchange rate policies and development strategies in Taiwan, Korea, Singapore and Thailand’, paper presented at Bordeaux University Conference on East Asian Growth, July 1996, and AUME Conference in Seoul, November 1996, revised February 1997.Google Scholar
Barrell, R. and Pain, N. (1996). ‘An econometric analysis of US foreign direct investment’, Review of Economics and Statistics, vol. LXXVIII, pp. 200207.CrossRefGoogle Scholar
Barrell, R. and Pain, N. (1997a), ‘Trade restraints and Japanese direct investment flows’, European Economic Review, forthcoming.Google Scholar
Barrell, R. and Pain, N. (1997b), ‘Foreign direct investment, technological change and economic growth within Europe’, paper presented at Royal Economic Society Conference, University of Staffordshire, March 1997, Economic Journal, forthcoming.CrossRefGoogle Scholar
Barrell, R., and, N. PainHubert, F. (1996). ‘Regionalism, innovation and the location of German foreign direct investment’, National Institute Discussion Paper no. 91.Google Scholar
Bayoumi, T., Coe, D.T. and Helpman, E. (1996), ‘R&D spillovers and global growth’, International Monetary Fund Working Paper WP/96/47.CrossRefGoogle Scholar
Blake, A.P. and Pain, N. (1994), ‘Investigating structural change in UK export performance: the role of innovation and direct investment’, National Institute Discussion Paper no.71.Google Scholar
Blomström, M. and Kokko, A. (1996), ‘Multinational corporations and spillovers’, CEPR Discussion Paper no. 1365.Google Scholar
Blomström, M. and Lipsey, R.E. (1989), ‘The export performance of US and Swedish multinationals’, Review of Income and Wealth, vol. 35 (3), pp. 245264.CrossRefGoogle Scholar
Borensztein, E., Gregorio, J. De and Lee, J. (1994), ‘How does foreign direct investment affect economic growth?’, International Monetary Fund Working Paper WP/94/110.Google Scholar
Brainard, S.L., (1993) ‘A simple theory of multinational corporations and trade with a trade-off between proximity and concentration’, Working Paper no. 4269, National Bureau of Economic Research.CrossRefGoogle Scholar
Cabral, S. (1995) ‘Comparative export behaviour of foreign and domestic firms in Portugal’, Banco de Portugal Economic Bulletin, March, pp. 6978.Google Scholar
Cassiers, I., De Villé, P. and Solar, P.M. (1996), ‘Economic growth in postwar Belgium’, in Crafts, N. and Toniolo, G. (eds.) Economic Growth In Europe Since 1945, Cambridge University Press.CrossRefGoogle Scholar
Caves, R.E. (1996), Multinational Enterprise And Economic Analysis (Second Edition), Cambridge University Press, Cambridge.Google Scholar
Coe, D., Helpman, E. and Hofmaister, A. (1997), ‘North-south R&D spillovers’, Economic Journal, vol. 107, no. 440.CrossRefGoogle Scholar
Crafts, N. and Toniolo, G., (1996) (eds.), Economic Growth In Europe Since 1945, Cambridge University Press, Cambridge.CrossRefGoogle Scholar
Dunning, J. (1988), ‘The eclectic paradigm of international production: a restatement and possible extensions’, Journal of International Business Studies, Spring 1988, pp. 131.CrossRefGoogle Scholar
Eaton, B.C., Lipsey, R.G. and Safarian, A.E. (1994), ‘The theory of multinational plant location in a regional trading area’, in Eden, L. (ed.) Multinationals In North America, The University of Calgary Press, Calgary.Google Scholar
Eltis, W. and Higham, D. (1995), ‘Closing the UK competitiveness gap’, National Institute Economic Review, no. 154, pp. 7184.CrossRefGoogle Scholar
Grossman, G.M. and Helpman, E. (1991), Innovation and Growth In The Global Economy, SAGE Publications, Cambridge, Mass.Google Scholar
Horstmann, I. and Markusen, J.R. (1987). ‘Licensing versus direct investment: a model of internalization by the multinational enterprise’, Canadian Journal of Economics, vol. 20, pp. 464481.CrossRefGoogle Scholar
Hubert, E., Pain, N. and Barrell, R. (1997), ‘Innovation and the regional and industrial pattern of German foreign direct investment’, prepared for the conference on ‘Investment, Innovation and the Diffusion of Technology in Europe’, held at NIESR, 21st February, 1997.Google Scholar
Krugman, P.R. (1995), ‘International trade theory and policy’, in Grossman, G. and Rogoff, K. (eds.) Handbook of International Economics Volume III, Elsevier, Amsterdam.Google Scholar
Layard, R., Nickell, S. and Jackman, R. (1991), Unemployment: Macroeconomic Performance And The Labour Market, Oxford University Press.Google Scholar
Markusen, J.R. (1995). ‘The boundaries of multinational enterprises and the theory of international trade’, Journal of Economic Perspectives, vol. 9, pp. 169189.CrossRefGoogle Scholar
Markusen, J.R. and Venables, A.J. (1996), ‘The increased importance of direct investment in North Atlantic economic relationships : a convergence hypothesis’, in Canzoneri, M.B., Ethier, W.J. and Grilli, V. (eds.), The New Transatlantic Economy, Cambridge University Press, Cambridge.Google Scholar
Mason, G. and Wagner, K. (1994), ‘Innovation and the skill mix: chemicals and engineering in Britain and Germany’, National Institute Economic Review, no. 148, pp. 6172.CrossRefGoogle Scholar
Mataloni, R.J. and Fahim-Nader, M. (1996), ‘Operations of US multinational companies: preliminary results from the 1994 Benchmark Survey’, Survey of Current Business, 76/12, pp. 1137.Google Scholar
Mundell, R.A. (1957), ‘International Trade and Factor Mobility’, American Economic Review, vol. 47, pp. 321335.Google Scholar
Oecd (1995), Foreign Direct Investment, Trade and Employment, OECD Paris.Google Scholar
Oecd (1996), International Direct Investment Statistics Yearbook, OECD Paris.Google Scholar
Pain, N. (1997), ‘Continental drift: European integration and the location of UK foreign direct investment’, The Manchester School, forthcoming.CrossRefGoogle Scholar
Pain, N. and Wakelin, K. (1996), ‘Foreign direct investment and export performance’, paper presented at 23rd annual conference of the European Association for Research in Industrial Economies, Vienna, September 1996 and International Economics Study Group conference, Nottingham, April 1997.Google Scholar
Pain, N. and Young, G. (1996), ‘Tax competition and the pattern of European foreign direct investment’, presented at 52nd Congress of International Institute of Public Finance, Tel Aviv, August and IFS conference on Public Policy and the Location of Economic Activity, November.Google Scholar
Patel, P. and Pavitt, K. (1995), ‘Patterns of technological activity: their measurement and interpretation’, in Stoneman, P. (ed.), Handbook of The Economics Of Innovation And Technological Change, Basil Blackwell, Oxford.Google Scholar
Prais, S., (1995), Productivity, Education and Training, Cambridge University Press.Google Scholar
Stokman, A.C.J. and Vlaar, P.J.G. (1996), ‘Volatility, international trade and capital flows’, De Nederlandsche Bank Reprint Series no. 453.CrossRefGoogle Scholar
Svensson, R. (1996), ‘Effects of overseas production on home country exports: evidence based on Swedish multinationals’, Weltwirtschaftliches Archiv, vol. 132, pp. 304329.CrossRefGoogle Scholar
Unctad (1996), World Investment Report 1996, United Nations, Geneva.Google Scholar
Wang, J.Y. (1990), ‘Growth, technology transfer and the long-run theory of international capital movements’, Journal of International Economics, vol. 29, pp. 255271.CrossRefGoogle Scholar
Wto (1996), World Trade Organisation Annual Report, WTO Geneva.Google Scholar