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Title: The role of cross-sector FDI spillovers in explaining performance outcomes : evidence from the UK /
Author: Phong, Le Thai
Awarding Body: University of Leeds
Current Institution: University of Leeds
Date of Award: 2012
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This thesis develops a theoretical framework, empirically tests cross-sector FDI spillovers, and explores the mechanisms underpinning externalities. Using a combination of firm-level panel datasets of 1,000 UKfirms and industry-level data of inward FDI into the UK, itfinds that there exist positive cross-sector FDI spillovers (i.e. between manufacturing and service industries) and negative intra- and inter-industry externalities. The scale and scope of such spillovers depend on firm idiosyncrasies and exogenous factors of the industry in which local and foreign firms interact. J' Overall, this study finds strong evidence to support the notion that FDI spillovers do exist. However, the findings contradict the majority of conventional beliefs, which state that FDI would bring benefit to local businesses. Rather, this thesis shows that FDI spillovers are a multi- dimensional phenomenon: while intra- and inter-industry spillovers are negative, indigenous firms enjoy positive externalities arising from the interaction between manufacturing and services. The positive or negative outcomes of FDI spillovers, as theory predicts, can be explained by a number of firm-specific and exogenous factors. These act as moderators, influencing the relationship between local firm performance and spillovers. The thesis offers two main contributions to the IB literature on FDI spillovers. First, it extends prior work by exploring, theoretically and empirically, the inter-connection between manufacturing and services in explaining cross-sector FDI spillovers. It adds to the current literature by capturing more fully the theory and Impacts of foreign direct investment in the host country, enabling us to connect scattered research on manufacturing and services. Second, this thesis explains the mechanisms under which FDI spillovers take place by incorporating firm-specific idiosyncrasies and exogenous factors as moderators. We find that the root of the problem of the previous mixed empirical results is the pervasiveness of various moderators of firm attributes, and external factors that influence the performance-spillovers relationship. Firms are not passive recipients of external knowledge but are competent learning organisations characterised by the heterogeneity of resource profiles. Thus, local firms are not equally impacted by the presence of foreign firms. Some firms are able to benefit, some are impaired, while others might not be influenced at all. The extent to which foreign firms affect local firm performance depends not only on the characteristics of local firms themselves but also on the industry that they operate in.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available