FOREIGN DIRECT INVESTMENT, TRANSACTIONS LINKAGES, AND THE PERFORMANCE OF THE DOMESTIC SECTOR. Nigel Driffield + , Max Munday and Annette Roberts Abstract Using data from the UK Census of Production, including foreign ownership data, and information from UK industry Input-Output tables, this paper examines whether the intensity of transactions linkages between foreign and domestic firms affects productivity growth in domestic manufacturing industries. The implications of the findings for policies promoting linkages between multinational and domestic firms in the UK economy are outlined. Keywords: Foreign direct investment; Productivity spillovers; Input-Output tables. JEL Classification: F23, L14, O33. +Address for correspondence Nigel Driffield, Birmingham Business School, Birmingham University, Edgbaston, Birmingham. B15 2TT. Tel 0121 414 3555 Fax0121 414 6707 Email: N.L.Driffield@bham.ac.uk Max Munday & Annette Roberts Welsh Economy Research Unit, Cardiff Business School, Colum Drive, Cardiff CF10 3EU, United Kingdom. Tel 02920 874173 Fax 02920 874419 Email MundayMC@cf.ac.uk RobertsA1@cf.ac.uk April 2002