Innovation and the regional and industrial pattern of German foreign direct investment
In: IGS discussion papers series, 98,11
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In: IGS discussion papers series, 98,11
World Affairs Online
In: The Manchester School, Band 70, Heft 3, S. 336-363
ISSN: 1467-9957
Foreign direct investment in the European Economic Area (EEA) has grown rapidly in recent years. This paper tests for structural change in the geographical and industrial pattern of foreign direct investment in Europe using a panel data set on outward investment by German companies in the EEA since 1980. There is evidence of significant structural change since 1990, with nearly all locations and industries seeing a higher level of cross–border investment than might have been expected. We also investigate the scope for national governments to affect location choice through the use of fiscal instruments such as corporation taxes, investment in infrastructure and other forms of development grants and subsidies. The findings are mixed. Some measures, such as tax competitiveness, appear important but are sensitive to the specification of the model. However, the level of government fixed investment expenditure relative to that in other economies is found to have a significant positive impact, particularly in locations with less need for EU structural funds. Although the direct marginal impact appears relatively small, an additional finding of significant agglomeration forces suggests that fiscal policies could still have a permanent influence on the location of economic activities.
In: Scottish journal of political economy: the journal of the Scottish Economic Society, Band 48, Heft 2, S. 134-147
ISSN: 1467-9485
This paper investigates the impact of direct investment by foreign‐owned companies on technical progress and hence labour productivity in the UK manufacturing sector. Using an industry‐level panel data set we find that foreign‐owned firms have a significant positive effect on the level of technical efficiency in domestic firms. There is evidence of significant intra‐industry and inter‐industry spillovers from inward investment. These findings remain robust even when other factors such as imports and domestic R&D expenditures are allowed for. Inward investment appears to be a much more important source of technical progress than foreign trade.
In: National Institute economic review: journal of the National Institute of Economic and Social Research, Band 163, S. 37-63
ISSN: 1741-3036
Global economic conditions improved markedly last year. Within the OECD, output growth is estimated to have risen to 3 per cent, the best outturn since 1989. Growth was particularly buoyant in North America, reflecting strong domestic demand, with the NAFTA economies forecast to have grown by 4 per cent. Economic prospects also improved in Europe, with growth picking up in both Germany and France. However this has yet to produce any significant declines in unemployment in those countries, suggesting that a considerable degree of slack still remains in their labour markets. In contrast, the unemployment rate in the United States has fallen under 5 per cent for the first time since the early 1970s. Growth has slowed, although not yet collapsed, in Japan with domestic demand having proved unexpectedly weak in the aftermath of moves to tighten fiscal policy. We expect to see some slowdown in global growth this year, largely as a result of the impact of recent developments in Asia, with the growth in OECD GDP projected to moderate to 2.6 per cent, some 0.4 percentage points lower than we would otherwise have predicted.
In: National Institute economic review: journal of the National Institute of Economic and Social Research, Band 161, S. 26-52
ISSN: 1741-3036
Global activity continued to gain momentum in the early months of this year, helped by above trend growth in the North American economies. There was also a temporary acceleration in the growth of consumers' expenditure in Japan prior to a rise in indirect taxes in April. Total output in the OECD economies is estimated to have risen by 0.9 per cent in the first quarter of the year to a level 2.9 per cent higher than a year earlier. Output in the NAFTA member states rose by 1.4 per cent, and was over 4 per cent higher than in the first quarter of 1996. Conditions appear to remain favourable for steady growth through the remainder of this year, with OECD GDP projected to rise by 2¾ per cent in 1997 and 2½ per cent in 1998.
In: National Institute economic review: journal of the National Institute of Economic and Social Research, Band 162, S. 25-55
ISSN: 1741-3036
Global growth appears to have been relatively strong during the last year. In the Anglo-Saxon world the economic expansion has now lasted six years. Growth in continental Europe also now appears to be relatively robust, after a significant slowdown in the first half of last year. The OECD economies are projected to grow by around 3 per cent this year. Despite this, there continues to be little evidence of emerging inflationary pressures. We anticipate that OECD inflation will average around 2 per cent in 1997, some 2–2½ percentage points lower than in the equivalent upswing in the late 1980s.
In: National Institute economic review: journal of the National Institute of Economic and Social Research, Band 158, S. 36-63
ISSN: 1741-3036
There was a pause in growth in a number of European economies around the end of 1995, with weak domestic demand leading to moves to return stocks to more normal levels. This was exacerbated by bad weather in the first quarter of 1996. Rather pessimistic conclusions were widely drawn from these few months, but recent developments, especially in Germany have made us, and others, more optimistic about the short-term prospects. In the EU as a whole output rose by 0.49 per cent in the first quarter. Whilst output in France and Italy appears to have declined in the second quarter, in part due to statistical factors arising from the extra working day in the first quarter, growth remained at or above trend levels in the UK, Spain, the Netherlands and Denmark, and recovered significantly in Germany. Industrial output in Germany rose continually in the six months to August, with manufacturing output at its highest level since 1992. This has begun to be reflected elsewhere in the EU, with industrial confidence rising for the first time in 19 months.
In: National Institute economic review: journal of the National Institute of Economic and Social Research, Band 165, S. 54-65
ISSN: 1741-3036
Activity picked up markedly in the EU area last year; growth was estimated to have been 2.6 per cent compared with 1.8 per cent recorded in 1996. However the aggregate movement masks some significant divergences in economic performance. Growth was relatively modest, at between 2–2½ per cent in Germany, France and Austria, whilst Italy and Sweden recorded growth rates below 2 per cent for the second year running. The fastest growth was achieved in the Irish Republic where output expanded by over 10 per cent last year, following cumulative growth of 27 per cent in the previous three years. Finland also recorded rapid growth of nearly 6 per cent and nearly all the remaining EU countries enjoyed growth rates of 3 per cent or above. Outside the EU, activity remained robust in Norway, Poland and Hungary but was markedly weaker in the Czech Republic and Switzerland. Indeed real GDP has barely changed in Switzerland since 1990, partly reflecting the strength of the Swiss franc, although there are now signs that growth will be stronger in 1998 as the franc has depreciated since the end of 1995.
In: National Institute economic review: journal of the National Institute of Economic and Social Research, Band 168, S. 39-46
ISSN: 1741-3036
In: National Institute economic review: journal of the National Institute of Economic and Social Research, Band 169, S. 38-54
ISSN: 1741-3036
The short-term prospects for the world economy appear to have brightened since the beginning of this year. Growth has continued at a rapid pace in the North American economies, helped by the prompt monetary response of the Federal Reserve to the turbulence in the global financial and currency markets in the latter half of last year and renewed vigour in equity prices. GDP in the United States is expected to rise by close to 4 per cent for the third year in succession. Some improvement in growth prospects now appears likely in Europe. After the marked slowdown at the turn of the year economic activity in the Euro Area and the UK appears set to return towards trend rates from the second half of this year, helped by relaxed monetary conditions.
In: National Institute economic review: journal of the National Institute of Economic and Social Research, Band 166, S. 35-43
ISSN: 1741-3036
The US economy continued to expand strongly in the first half of this year. GDP rose by 2 per cent compared to the latter half of last year, broadly in line with the pace of growth observed throughout 1997. The unemployment rate fell to its lowest level since 1970, with private sector demand continuing to reflect the impact of the sustained appreciation in equity prices since 1994. We expect GDP growth to be a little under 3½ per cent this year. Recent events have sharply changed the short-term economic outlook for the coming months. Growth is now projected to slow significantly, with domestic demand pressures easing and external demand remaining weak. The correction in equity prices and the tighter financial conditions facing many companies should begin to exert a significant drag on economic growth, in spite of likely further relaxation in the stance of monetary policy. GDP is expected to rise by around 1½ per cent both in 1999 and in the year 2000. If credit market conditions were to tighten further, or asset prices to show a renewed decline, then the economy could well move close to outright recession by the end of next year.
In: National Institute economic review: journal of the National Institute of Economic and Social Research, Band 171, S. 36-69
ISSN: 1741-3036
The short-term economic outlook has improved significantly in nearly all parts of the world economy over the past year. Growth has continued at a rapid pace in the North American economies, helped by the renewed vigour in equity prices in recent months and further strong growth in labour productivity. GDP in the United States is estimated to have risen by over 4 per cent in 1999, for the third year in succession. We expect to see further growth of 3¾ per cent this year. The European Union economies have embarked on a cyclical upturn, helped by accommodative monetary policies and the impact of improved external demand.
In: National Institute economic review: journal of the National Institute of Economic and Social Research, Band 168, S. 47-69
ISSN: 1741-3036