Determinants of entry and exit in the foreign owned sector of UK manufacturing

Nigel Driffield

Research output: Contribution to journalArticle

Abstract

This paper examines the extent to which foreign entry and exit in the UK is related to domestic industry characteristics. The units of analysis are firm numbers, and thus entry and exit at the industry level are treated as being generated by Poisson processes. This therefore uses quasimaximum likelihood estimation, to estimate entry and exit functions simultaneously. The results demonstrate that foreign entry is attracted by industry level profitability and performance, but that firm specific 'ownership' advantages are also important. The results also demonstrate that inward investors that are motivated by the desire to exploit firm-specific assets, are unlikely to be more transient than domestic firms. This however, cannot be said of those foreign entrants who are attracted to the UK by location advantage or investment incentives.
Original languageEnglish
Pages (from-to)153-156
Number of pages4
JournalApplied Economics Letters
Volume6
Issue number3
DOIs
Publication statusPublished - 1999

Keywords

  • UK
  • domestic industry characteristics
  • foreign entry
  • industry level profitability
  • performance

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