ABSTRACT
For the purpose of economic development, Hudson (1998) notes that there are three important characteristics of foreign-owned plants; the quantity, quality and permanence of employment provided by the plants. Having described the pattern of project jobs and plant employment in the preceding two chapters, this chapter focuses on the issue of plant survival. From the discussion of Chapter 4 it is well known that the success in attracting FDI to the regions is blighted by the relatively high failure rate of these plants (McCloughan and Stone, 1998; Gorg and Strobl, 2003). It poses a dilemma for the policymaker, as the FDI plants are often located in high unemployment areas (Head et al, 1995; Friedman et al, 1992), attracted by generous location packages that are available both in the UK and elsewhere (Wren, 2005a; Crozet et al, 2004). The issue is not trivial, as in the North-East region about a fifth of FDI plants arriving since the mid-1980s closed within a decade or so, taking with them more than 10,000 jobs (Jones and Wren, 2004c), and there is a similar pattern in other UK peripheral regions (see Stone and Peck, 1996).
