Abstract:

Foreign direct investment (FDI) has grown rapidly in recent decades. Through FDI, firms headquartered in the UK can own and operate subsidiaries throughout the world. FDI opportunities give firms a choice between investing in the UK and investing in other countries. And this leads to international competition to attract the jobs, investment and access to new technologies that FDI brings.

There are concerns that the UK’s vote to leave the European Union (EU) in June 2016 may have led UK firms to redirect investment abroad. In particular, there is substantial anecdotal evidence that the threat of reduced access to the EU market after Brexit has pushed UK firms into setting up subsidiaries or acquiring companies in the remaining EU member states.