Productivity and labour demand effects of inward and outward foreign direct investment on UK industry

Nigel Driffield, James H. Love, Karl Taylor

Research output: Contribution to journalArticle


We relate the technological and factor price determinants of inward and outward foreign direct investment (FDI) to its potential productivity and labour market effects on both host and home economies. This allows us to distinguish clearly between technology-sourcing and technologyexploiting FDI, and to identify FDI that is linked to labour cost differentials. We then empirically examine the effects of different types of FDI into and out of the UK on domestic (i.e. UK) productivity and on the demand for skilled and unskilled labour at the industry level.
Original languageEnglish
Pages (from-to)171-203
Number of pages33
JournalManchester School
Issue number2
Publication statusPublished - Mar 2009


Bibliographical note

The definitive version is available at


  • inward foreign direct investment
  • outward foreign direct investment
  • potential productivity
  • labour market effects
  • economie
  • technology-sourcing
  • technology-exploiting

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