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<p>I use within-firm, plant-level data combined with geographic information on firms' overseas operations to examine how investment in low-wage economies affects firms' home-country operations. To remain close to theory I focus on changes in firms' organisational and industrial structure driven by plant closures. As predicted by models of vertical multinationals I find that investment in relatively low-wage economies is associated with plant closures in relatively low-skill, labour-intensive industries in the UK. The findings are of interest in the context of the relaxation of barriers to inward investment in low-wage economies.</p>
Authors
Helen Simpson
Working Paper details
- DOI
- 10.1920/wp.ifs.2007.0707
- Publisher
- IFS
Suggested citation
Simpson, H. (2007). Investment abroad and adjustment at home: evidence from UK multinational firms. London: IFS. Available at: https://ifs.org.uk/publications/investment-abroad-and-adjustment-home-evidence-uk-multinational-firms (accessed: 29 March 2024).
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