The Impact of Recent Recessionary Trends on the Distribution of Foreign Direct Investment in UK

By

ACKNOWLEDGMENT

I would like to thank almighty Lord for granting me the capability to proceed successfully. I would like to thank my supervisor, colleagues, and all those who helped me in completing this thesis, without their assistance and guidance this could not be possible. Last but not least, I would like to dedicate my thesis to all those who believe in the richness of learning



DECLARATION

I adjudge, the content of this dissertation is completely collected and done by unaided effort and the material in it, has not been published ever before. The opinion that is reflected in this dissertation is purely my opinion and does not represent any University's opinion.

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ABSTRACT

In this research study the impact of recession on FDI in UK has been analyzed and discussed. The purpose of this research study is to find the impact of recession in UK and to find out how the recessionary trend affects FDI in UK, and to find out the role of FDI in UK. The qualitative research methodology has been used in this research and in qualitative research method different secondary sources are used for analyzing and collection of data. Overall, FDI has positive impact on economic-development but magnitude of impact depends on availability of complementary resources, especially on domestic stock of human capital. Growth of FDI stock in UK has created an impact in the economic development by optimizing inputs, promoting exports, attracting further FDI, promoting domestic productivity, adding to the GDP growth rate, and balancing the budget. Growth in UK eventually helps in creating jobs, consumption, and the emergence of a middle class in a society. Apart from all the negative impacts of recession in UK, the FDI has not been affected much. Foreign investors still investing in UK as the economy of this country is strong enough and the recession has not affected this country much as compare to other countries' economies.

TABLE OF CONTENTS

ACKNOWLEDGMENTII

DECLARATIONIII

ABSTRACTIV

CHAPTER 1: INTRODUCTION1

Background of the Research1

Research Aim and Objectives2

Aim2

Objectives2

Research Questions2

Significance of the Research2

Project Plan and Approach3

CHAPTER 2: LITERATURE REVIEW5

FDI and Theoretical Aspects5

FDI and Recessionary Impact on FDI6

Positive Impact of FDI6

Negative Impact of FDI7

CHAPTER 3: ANALYSIS AND DISCUSSION10

Foreign Direct investment in UK and other countries10

Impact of Recession on UK13

Technology15

Diversification15

Impact of FDI in UK16

Economic Growth16

Competitive Business Environment17

Discussion18

CHAPTER 4: CONCLUSION AND RECOMMENDATIONS23

Recommendations24

REFERENCES25

CHAPTER 1: INTRODUCTION

Background of the Research

Foreign direct investment (FDI) flows have stagnated in past years in Europe due to recent economic recession. The global crisis has consequences in this area too. Aisbett (2008, 50)The uncertainty brought about by the economic crisis has temporarily changed the priorities of investors who are now giving preference to more traditional markets. Leaders of the world economy today especially heart to let the crisis and to maximize their return on existing assets.

Aizenman & Marion (2004, 125), although the entry into new markets offers tremendous opportunities, it is also accompanied by increased risks. Allen (2009, 75), Europe is seen as predictable and safe. Local investors today are also more ...