Abstract: Do State and Politics Matter? The Case of Nissan's Direct Investment in Great Britain and Its Implications for British Leyland

Tommaso Pardi

Abstract

This essay looks at a quite neglected side of the history of foreign direct investment (FDI) and multinationals: the political and diplomatic negotiations that often surround FDI projects and their wider implications for both the investors and the indigenous companies that might be affected by the entrance of new competitors. From this perspective, the case study analyzed here is of great relevance: it is the first direct investment made by a Japanese carmaker in Europe, and it was negotiated from 1981 to 1984 between Nissan and the British government led by Margaret Thatcher, which was also at the time the owner of the "national champion" British Leyland (BL). Funding BL while attracting a new powerful competitor seemed at the time and still appears today as a very contradictory strategy. The essay will show, however, that this strategy was coherent with the shift in political support from the ailing national carmaker to its first-tier suppliers. It will also provide some new insights into the more general debate concerning the decline of BL and the role that the state and politics have played in that story.

BEH On-Line Paper