Spillovers or Shake out? Inward FDI, Business Formation, and Firm Survival in the UK

About the Project

Project Details

This project tackles an unresolved problem in international business and regional studies:whether, when, and how inward Foreign Direct Investment (FDI) translates into domestic firm creation and survival in advanced host economies such as the UK, and how this relationship is mediated by the technological and environmental nature of investments, i.e. green versus non‑green FDI. The question is highly relevant because UK industrial strategy and local growth policy often treat FDI attraction as a central lever for job creation, productivity and business dynamism, while simultaneously seeking to strengthen linkages to net‑zero targets and the transition to a low‑carbon economy. Existing evidence, however, is mixed and indicates that benefits are highly conditional on institutions, human capital, the type of FDI activity (e.g. innovation‑oriented vs routine functions), and the sectors and regions in which investments are attracted. As the UK aims for a net‑zero economy by 2050, understanding and leveraging the drivers of the green transition is crucial. Green FDI (GFDI) has expanded rapidly as a share of total FDI and naturally embeds green technologies that are typically more novel, complex and pervasive than non‑green ones. By combining the usual R&D spillovers with additional environmental externalities, GFDI can generate social returns that far exceed private gains, making it a key vector for the diffusion of advanced green technologies, environmental practices and organisational routines. Yet we still know little about whether these investments also translate into business dynamism – that is, higher rates of firm entry and improved survival and growth among domestic firms – and whether green projects perform differently from non‑green ones in this respect. Inward FDI can influence host‑country business dynamism through two opposing forces. On the one hand, foreign affiliates may generate positive spillovers via demand creation, supply‑chain linkages, knowledge transfer and labour mobility, encouraging new firm entry and supporting the growth and survival of capable incumbents. On the other hand, inwardFDI can induce crowding‑out, as superior foreign competitors absorb market share, talent and finance, discouraging start‑ups and pushing marginal firms towards exit. Recent work suggests these effects are non‑linear and context‑dependent, with some studies finding inverted‑U shaped effects on new venture creation across regions and industries, and clear differences by FDI function and knowledge intensity. Our approach is to move beyond “more FDI is better” thinking by identifying the conditions under which inward FDI supports (i) new firm births and (ii) the survival and growth trajectories of existing domestic firms, and by distinguishing effects across FDI types (green vs non‑green, and by functional activity) and local capabilities. We will exploit a unique and already linked data infrastructure that combines FDI project data (e.g. Orbis Cross‑Border Investments, including GFDI), patent and intellectual property information (Orbis Intellectual Property, PATSTAT Global 2025), and UK firm‑level data from the ONS Secure ResearchService (Business Register and related business demography sources). This will allow us to identify the technological and environmental characteristics of FDI projects, trace their location and timing, and match them to local patterns of business creation and survival.

The PhD student will be associated with the Centre for Business Prosperity

Person Specification

The successful applicant should hold, or expect to achieve:

A First or Upper Second Class Honours undergraduate degree, and a Masters degree with Merit or Distinction, both in relevant subjects.

Qualifications from overseas institutions will be considered, but performance must be equivalent to that described above, and the University reserves the right to ascertain this equivalence according to its own criteria.

Desirable / Essential Skills or Experience

Having successfully attended and passed econometrics modules at the UG or PG level

Submitting an application

We can only consider applications that are complete and have all supporting documents. Applications that do not provide all the relevant documents will be automatically rejected.Your application must include:

1. English language copies of the transcripts and certificates for all your higher education degrees, including any Bachelor degrees.
2. A Research Statement detailing your understanding of the research area, how you would approach the project, and a brief review of relevant literature. Be sure to use the title of the research project you are applying for. There is no set format or word count.
3. A personal statement which outlines any further information which you think is relevant to your application, such as your personal suitability for research, career aspirations, possible future research interests, and further description of relevant employment experience.
4. A Curriculum Vitae (Resume) which details your education and work history.
5. Two academic refereeswho can discuss your suitability for independent research. References must be on headed paper, signed and dated no more than 2 years old. At least one reference should be from your most recent University. You can submit your references at a later date if necessary.
6. Evidence that you meet the English Language requirements. If you do not currently meet the language requirements, you can submit this at a later stage.
7. A copy of your passport. Where relevant, include evidence of settled or pre-settled status.

Contact Information

For enquiries about this project, contact t.mickiewicz@aston.ac.uk; d.ribaudo@aston.ac.uk; n.prashar14@aston.ac.uk

Location

This position will be based on the Aston Campus in Birmingham, UK. The successful candidate will need to be located within a reasonable distance of the campus, and will be expected to visit in person regularly.

Interviews

Interviews will be conducted online via Microsoft Teams. If you are shortlisted, you will be contacted directly with details of the interview.

Funding Notes

This project covers all tuition fees and includes an annual stipend.

Please note that the successful candidate will be responsible for any costs relating to moving to Birmingham and/or visiting the Aston campus. International students must meet the financial requirements for the visa, flights, and NHS Surcharge. Applicants should be confident that they can meet these costs before applying.