Items where Author is "Simpson, Helen"

This paper provides new evidence on the effects of overseas FDI on the skill-mix of multinational firms’ home-country operations. The analysis exploits China's WTO accession to identify the impact of outward investment into a low-wage economy and uses plant-level data to investigate changes in industrial structure within firms driven by plant closures. As predicted by models of vertical FDI, the paper demonstrates that overseas investment in low-wage economies is associated with asymmetric effects on workers in low- and high-skill industries in the home economy and, in particular, with firms closing down plants in low-skill industries.

This paper provides new empirical evidence on the relationship between the structure of firms’ overseas FDI and the performance and organisation of their home-country operations in both manufacturing and business services. It addresses two questions. First, does sorting into multinational status on the basis of productivity extend to the scale of overseas activity? Second, is there evidence that off-shoring to low-wage countries has asymmetric effects on high and low-skill activities in the home economy? The paper considers heterogeneity in firms’ outward FDI strategies and in their behaviour at home, distinguishing between low-skill and high-skill-intensive activities. I differentiate between firms that invest in relatively low-wage economies and hence might be engaged in vertical FDI, and those that only invest in high-wage economies. I find that firms that invest in low-wage economies simultaneously invest in a large number of high-wage economies, employing complex FDI strategies. I add to existing evidence by demonstrating that selection into multinational status on productivity extends beyond the decision of whether or not to engage in FDI, to the geographic scope of overseas operations. This is consistent with the highest productivity firms being best able to overcome large fixed costs of establishing multiple overseas facilities. I find evidence consistent with differential effects of vertical FDI on firms’ high and low-skill manufacturing activity in the UK. Relocating low-skill activity to relatively low-wage economies could enable a firm to expand output, with potential positive effects on investment, employment and output in complementary (high-skill) activities at home. For firms investing in relatively low-wage economies, I find that labour in these countries may substitute for relatively low-skilled labour in the UK. In high-skill manufacturing industries I find that multinationals that invest in low-wage economies are larger, more capital intensive and more intensive in their use of intermediate inputs than other UK-owned firms.

We investigate evidence for spatially mediated knowledge transfer from university research. We examine whether firms locate R&D near universities, and whether those that do are more likely to co-operate with, or source knowledge from them. We find that pharmaceutical firms locate R&D near to frontier chemistry research departments, consistent with accessing localized knowledge spillovers, but also linked to the presence of science parks. Chemicals R&D exhibits co-location with materials science departments, with firms within 10 km more likely to directly engage with universities. In other industries we find less, or no evidence of co-location with university research.

We examine whether discretionary government grants influence where domestic and multinational firms locate new plants, and how the presence of agglomeration externalities interacts with these policy instruments. We find that a region's existing industrial structure has an effect on the location of new entrants. Grants do have a small effect in attracting plants to specific geographic areas, but importantly, we find that firms are less responsive to government subsidies in areas where there are fewer existing plants in their industry. This suggests that these subsidies are less effective in influencing firms' location decisions in the face of countervailing co-location benefits.

We investigate the geographic concentration and agglomeration of production activity in the UK at the four-digit industry level using a variety of measures. We relate these to comparable patterns in the US and France and find several similarities. We find that conditioning on industrial concentration, the most geographically concentrated industries appear to be relatively low-tech. We find evidence that plant survival rates are higher and both entry and exit rates are lower in more agglomerated industries, but that in some of the most agglomerated industries entry acts to re-enforce agglomeration.

This paper investigates the structure of firms’ outward FDI and their behaviour at home in both manufacturing and business services sectors. UK multinationals with overseas affiliates in low-wage economies invest simultaneously in a large number of high-wage countries. I find that more productive multinationals operate in a greater number of countries, consistent with their being able to bear the fixed costs of investing in numerous locations abroad. UK manufacturing plants owned by large-scale, low-wage economy outward investors display lower domestic employment growth, in particular in low-skill activities, consistent with low-wage economy labour substituting for low-skill labour in the UK.

This paper provides new evidence on the effects of overseas FDI on the skill-mix of multinational firms’ home-country operations. The analysis exploits China’s WTO accession to identify the impact of outward investment into a low-wage economy, and uses plant-level data to investigate changes in industrial structure within firms driven by plant closures. As predicted by models of vertical FDI the paper demonstrates that overseas investment in low-wage economies is associated with asymmetric effects on workers in low and high-skill industries in the home economy, and in particular with firms closing down plants in low-skill industries.

Following Meade (1978), we reconsider issues in the design of taxes on corporate income. We outline developments in economies and in economic thought over the last thirty years, and investigate how these developments should affect the design of taxes on corporate income. We consider a number of tax systems which have been proposed, distinguishing them in two main dimensions: the definition of what is to be taxed, and where it is to be taxed.

We examine whether social ties influence the careers of company executives. We analyse appointments to UK company boards, and exploit detailed data on executives’ educational backgrounds, boardroom experience and affiliations to elite clubs. We find that social connections, through membership of private members clubs and golf clubs seem to play a role in appointments. For example, being a member of the same golf club as a current director is associated with an increased probability of appointment. Professional connections made through the boardroom also appear to matter. Educational connections through attending the same Oxford or Cambridge college, play less of a role than social connections, although these may influence social club memberships. Our findings imply that less reliance on elite social networks in recruitment will be necessary to increase boardroom diversity.

We examine whether social ties influence the careers of company executives. We analyse appointments to UK company boards, and exploit detailed data on executives’ educational backgrounds, boardroom experience and affiliations to elite clubs. We find that social connections, through membership of private members clubs and golf clubs seem to play a role in appointments. For example, being a member of the same golf club as a current director is associated with an increased probability of appointment. Professional connections made through the boardroom also appear to matter. Educational connections through attending the same Oxford or Cambridge college, play less of a role than social connections, although these may influence social club memberships. Our findings imply that less reliance on elite social networks in recruitment will be necessary to increase boardroom diversity.

This work was based on data from the Annual Respondents Database, produced by the Office for National Statistics(ONS) and supplied by the Secure Data Service at the UK Data Archive. The data are Crown Copyright and reproduced with the permission of the controller of HMSO and Queen's Printer for Scotland. The use of the data in this work does not imply the endorsement of ONS or the Secure Data Service at the UK Data Archive in relation to the interpretation or analysis of the data. This work uses research datasets which may not exactly reproduce National Statistics aggregates.