Exploring the regional distribution of inbound FDI in the United Kingdom in theory and practice – evidence from a five region study

Abstract

This paper examines the main factors that attract inbound foreign direct investment (FDI) at the UK regional level, using econometric data from five sample UK regions (the South East, West Midlands, North West, Wales and Scotland) broadly representing the country’s regional economic divide. The findings indicate that regional and national (but not EU-level) factors, linked to several underlying strategic determinants help determine the regional distribution of inbound FDI, and its inter-regional variation. The paper concludes that governmental policymakers at the national and regional levels can have an important role to play in drawing targeted FDI inflows to the UK regions.