Estimating the economic impact of FDI to support DIT’s promotion strategy: analytical report
Methodology and findings of analysis carried out to estimate the impact of FDI on the British economy to support DIT’s value-based investment promotion strategy.
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Based on a comprehensive literature review, this report identifies various economic factors that are relevant when assessing the impact of inward foreign direct investment (FDI) on the UK economy.
The report discusses the analysis undertaken to understand the economic impact FDI has had in Great Britain between 1998 and 2014 on gross value added (GVA), employment, average annual wages, labour productivity and R&D expenditure.
Based on an econometric model, we find that, on average, FDI has a positive impact on all of these economic factors. The analysis will enable effective streamlining and targeting of the Department for International Trade’s (DIT) services to promote FDI in those areas or sectors where the economic impact is maximised.