Foreign Direct Investment in the UK : Flows, Attitudes, and Implications

In this paper we examine foreign investment in the UK – a perhaps puzzling, even paradoxical, issue to explore, since the UK is itself, even before adjusting for the size of the British economy, one of the world's biggest overseas investors. This, we would conjecture, may go a long way to explain what we find. But to go immediately to our conclusions would be distinctly premature. We start by outlining the rest of the paper. In the first section we provide some historical background, setting UK investment in a long-run context. Then we turn to some possible approaches to the analysis of inward investment. Having laid these out, we follow that with some hypotheses based on them. There is then a review of previous work on inward investment into the UK. Then we set out our data, and, having discussed its limitations, test our hypotheses against it. Then we seek to draw some conclusions