The changing patterns of inward investment in the United Kingdom

Bureau van Dijk, a Moody’s Analytics company, in collaboration with Warwick Business School, and funded by The Productivity Institute, has launched the first study tracking the changing patterns of inward investment in the United Kingdom (UK). The study seeks to explore the latest intelligence on foreign direct investment (FDI) flows into the UK, and what that means for productivity. It analyzes the UK’s trading relations with the rest of the world as it becomes more certain and as we emerge from the COVID-19 pandemic.

Starting with an assessment of the changing patterns of FDI prior to Brexit, our research suggests that, while volumes of inward investment have varied patterns, distinctions between merger and acquisition (M&A) and greenfield investments in terms of source country, have stayed fairly similar, with approximately two-thirds of inward FDI into the UK originating in the traditional markets of the European Union (EU) and the United States of America (USA).

However, analysis of the largest investments suggests that high proportions are linked to infrastructure, or motivated by the desire of foreign firms to acquire knowledge, rather than to leverage their technology or knowledge into UK markets.

Source: Orbis Crossborder Investment

It has long been recognized that inward investment into the UK is not just a major source of employment, but also a source of innovation and productivity growth, because multinational enterprises (MNEs) are known to have a productivity advantage over domestic firms, which allows them to internationalize.

To read the full report, visit our white paper

Find out more about how our Orbis Crossborder Investment solution facilitated this advanced data analysis.