Foreign Direct Investment (FDI) has been a complex topic, however its fundamental features have enabled it to shape the world we live in and is the backbone of many countries who would not survive without it. Being part of the European Union (EU), the United Kingdom (UK) was cocooned in a union full of rules and regulations that did not please its residents. The decision to leave the EU was taken and therefore these rules and regulations are not applicable and this in turn will drastically affect FDI.
Despite being one of the world’s greatest powerhouse, Brexit offers a great threat to its industries that have had solid foundations within the EU as well as the workforce it holds as the UK holds over 3 million EU nationals. The UK offers an abundance of incentives for investors although these have been affected by 3 the UK’s top industries, Banking and Finance, Oil and Gas and Manufacturing with many companies in these industries agreeing that Brexit will have a negative impact on their business practices even with the government trying to get the best Brexit deal.
This dissertation will critically analyse the literature on FDI and how the host country determinates will be used in order to analyse their affect and how it would differ after Brexit. The UK’s attractiveness for FDI was evident in the results that were obtained, which provided a similar theme to variables within the host country determinates that in turn allowed for recommendations to be made on the industries and how future practices could be handled.
Table of Contents
1 Introduction
1.1 Chapter Outline
1.2 Theoretical setting
1.3 Topic Preview
1.4 Research Question and Objectives
2 Literature review
2.1 Chapter Outline
2.2 Definition of FDI
2.3 Types of FDI
2.3.1 Resource seeking FDI
2.3.2 Market seeking FDI
2.3.3 Efficiency seeking FDI
2.3.4 Strategic asset seeking FDI
2.4 Eclectic Paradigm Theory (OLI)
2.5 Product Life Cycle
2.6 Host Country Determinates of FDI
2.6.1 Political Determinates
2.6.2 Economic determinates
2.6.3 Business Facilitation
2.6.4 Empirical studies
2.7 Chapter Summary and Contributions
3 Methodology
3.1 Chapter Outline
3.3 Research Philosophy
3.4 Research Approach
3.5 Research strategies
3.6 Time Horizons
3.7 Data Collection Methods
3.8 Quality and Limitations of Research
4 Findings and Results
4.1 Chapter Outline
4.2 United Kingdom Country Portrait
4.3 European Union and Brexit
4.4 Secondary Data
4.4.1 FDI Trends
4.4.2 Industries
4.5 Primary Data and Host country determinates
4.5.1 Host Country Determinates
4.6 Concluding Discussion
5 Conclusion
5.1 Chapter Outline
5.2 Concluding the findings
5.3 Recommendations
5.3.1 Manufacturing
5.3.2 Banking and Finance
5.3.3 Oil and Gas
5.4 Limitations and recommendations for future research
Research Objectives and Key Themes
The primary aim of this research is to evaluate the impact of Brexit on Foreign Direct Investment (FDI) within the United Kingdom, specifically focusing on how the separation from the European Union influences the attractiveness of the manufacturing, banking and finance, and oil and gas industries.
- Impact of Brexit on UK FDI flows
- Analysis of Host Country Determinates
- Strategic considerations for key UK industries
- Evaluation of post-Brexit economic uncertainties
- Review of theoretical FDI frameworks in a modern context
Excerpt from the Book
1.2 Theoretical setting
The international movement of money otherwise known as capital flows have been the backbone incentive of international trade for centuries in order to improve a host countries development. With appraisal to the widespread liberalisation across the world in the last few decades, (FDI) has recently exploded. The ease of doing international business made simpler with improved skills alongside the technological advances and the approval of free market economies has lured the use of FDI in this period of globalisation (Rahman, 2015).
In this era, it is essential that firms capitalise on the resources, markets and new technology that is available all over the world in order to be competitive. These incentives of foreign investment highlight how FDI is trending towards globalisation as current data supports and illustrates this statement. With the international migration of capital from nation to nation, come various luxuries to countries involved. These come in the form of technological advances to the host countries which would otherwise be highly-priced and difficult to implement within a firm that has limited knowledge, expertise and local funds. FDI also brings in benefits by generating new jobs and increasing local employment along with developing the human capital in the domestic market through training (Michie, 2001).
The benefits that come from FDI flows are increasingly lucrative however each country has their own rules and regulation into how FDI is carried out. This is where the European Union (EU) was developed which provides a stable single market platform to make FDI easier. Due to Brexit this is going to change. In addition, FDI is not evenly shared and the benefits that come from foreign investment are not shared equally across countries and industries. Government policies and regulations have played a big role in determining the attractiveness of FDI, and this has directed highly towards more developed countries where the bulk of FDI seems to circulate (Michie, 2001). Most of these countries belong to the Organisation for economic Corporation and Development (OECD), where a free economy and democratic governance is present.
Summary of Chapters
1 Introduction: Provides an overview of FDI as a driving force for economic development and outlines the research question regarding the impact of Brexit.
2 Literature review: Examines foundational FDI theories, including the OLI framework and Product Life Cycle, alongside host country determinants.
3 Methodology: Details the research design, utilizing a positivist philosophy and a deductive approach to analyze FDI trends and survey data.
4 Findings and Results: Presents secondary data on FDI trends and primary survey findings from companies within the manufacturing, banking, and energy sectors.
5 Conclusion: Summarizes the study's findings, highlighting the uncertainty post-Brexit and offering strategic recommendations for the industries studied.
Key Keywords
Brexit, Foreign Direct Investment, FDI, United Kingdom, Manufacturing, Banking and Finance, Oil and Gas, Host Country Determinants, Economic Growth, OLI Framework, European Union, Investment Incentives, Trade Relations, Market Trends, Globalisation
Frequently Asked Questions
What is the core focus of this research dissertation?
The study investigates the impact of Brexit on Foreign Direct Investment (FDI) in the UK, specifically analyzing the manufacturing, banking and finance, and oil and gas sectors.
Which industries are analyzed in the research?
The research focuses on the manufacturing industry, the banking and finance sector, and the oil and gas industry.
What is the primary research question?
The primary research question seeks to answer how Brexit will impact FDI within the UK, given the host country determinants for these specific industries.
What research methodology is employed?
The author adopts a positivist research philosophy with a deductive approach, utilizing both secondary data (statistics) and primary data (surveys with company representatives).
What does the main body of the work cover?
The body covers a literature review of FDI theories, a detailed methodology section, an analysis of secondary trends, and primary qualitative findings from industry surveys.
Which specific keywords define this work?
Key terms include Brexit, Foreign Direct Investment, OLI Framework, host country determinants, and UK industrial competitiveness.
How does the author interpret the impact of Brexit on political risk?
The author discusses that while theoretical models often suggest political risk is less significant for FDI, the primary research indicates that Brexit represents a major, unique risk factor for businesses in the UK.
What findings are presented regarding the energy sector?
The study finds that the oil and gas industry remains relatively stable due to the necessity of the product and existing resource-seeking FDI, despite the overarching economic uncertainties of Brexit.
Are there specific recommendations provided for businesses?
Yes, the author provides sector-specific advice, such as focusing on local suppliers for manufacturing or re-evaluating workforce retention strategies due to potential changes in EU migration policies.
- Quote paper
- Anonym (Author), 2017, What is the Impact of Brexit on Foreign Direct Investment (FDI) within the UK with a Focus on the Manufacturing, Banking and Finance, and Oil and Gas Industries?, Munich, GRIN Verlag, https://www.grin.com/document/381203
