Hymer and Uneven Development Revisited: Foreign Direct Investment and Regional Inequalities

Posted: 29 Feb 2008

See all articles by David Bailey

David Bailey

University of Birmingham - Birmingham Business School

Nigel L. Driffield

Aston University - Aston Business School

Date Written: DECEMBER 2002

Abstract

Picking up on one of Hymer's key contributions, this paper examines the impact that inward foreign direct investment (FDI) into the UK has on the patterns of development, both within and across regions. Using a panel of data for the manufacturing sector, the paper illustrates that even where one isolates the effect on the domestic sector alone, inward investment acts to increase the demand for skilled, relative to unskilled labour, and also generates the expected agglomeration effects in terms of the demand for capital investment. The paper then goes on to draw certain policy comparisons between these findings and the desired aim of attracting FDI, notably to increase demand for labour in those regions suffering structural unemployment, and secondly to reduce the disparities between regions.

Suggested Citation

Bailey, David Geoffrey and Driffield, Nigel L., Hymer and Uneven Development Revisited: Foreign Direct Investment and Regional Inequalities (DECEMBER 2002). Contributions to Political Economy, Vol. 21, pp. 55-68, 2002, Available at SSRN: https://ssrn.com/abstract=811319

David Geoffrey Bailey (Contact Author)

University of Birmingham - Birmingham Business School ( email )

Edgbaston Park Road
Birmingham, B15 2TY
United Kingdom

HOME PAGE: http://www.business.bham.ac.uk/business/page419.htm

Nigel L. Driffield

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

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