Assessing the Impacts of Foreign Manufacturing on Regional Economies: The Cases of Wales, Scotland and the West Midlands

Abstract

BRAND S., HILL S. and MUNDAY M. (2000) Assessing the impacts of foreign manufacturing on regional economies: the cases of Wales, Scotland and the West Midlands, Reg. Studies 34, 343-355. This paper examines the direct and indirect contributions made by foreign manufacturing companies to the regional economies of Wales, Scotland and the West Midlands. Survey data derived from foreign manufacturers in each region were used in conjunction with regional input-output tables to assess the comparative contributions of defined foreign and domestically owned sectors to regional value added. The analyses are a starting point for the more accurate targeting of regional resources to industry sectors in the respective regional economies. BRAND S., HILLS S. et MUNDAY M. (2000) Evaluer les retombees de l'industrie etrangere sur les economies regionales: etude de cas du Pays de Galles, de l'Ecosse et des West Midlands, Reg. Studies 34, 343-355. Cet article cherche � a examiner les roles direct et indirect joue par les entreprises industrielles etrangeres dans les economies regionales du Pays de Galles, de l'Ecosse et des West Midlands. A partir des donnees provenant d'une enquete aupres des industriels etrangers situes dans chaque region, conjointement avec des tableaux d'echanges intersectoriels, on evalue le role comparatif dans la valeur ajoutee regionale de quelques secteurs � a capital etranger ou domestique bien definis. Ces analyses constituent un premier pas dans le ciblage plus juste des ressources regionales affectees aux secteurs industriels dans les economies regionales en question. BRAND S., HILLS S. und MUNDAY M. (2000) Beurteilung der Auswirkung auslandischer Herstellung auf Regionalwirtschaften: der Fall Wales, Schottland und westliches Mittelland, Reg. Studies 34, 343-355. Dieser Aufsatz untersucht den direkten und den indirekten Beitrag auslandischer Firmen der herstellenden Industrie auf die Regionalwirtschaften von Wales. Schottland und dem westlichen Mittelland des Vereinigten Konigreichs. Daten von Umfragen unter auslandischen Herstellern in jeder dieser Regionen wurden in Verbindung mit regionalen Aufwands-und Ertragstabellen dazu benutzt, die vergleichsweisen Beitrage bestimmter auslandischer und im Inlandbesitz befindlicher Sektoren auf regionalen Mehrwert hin zu bewerten. Die Analysen stellen einen Ausgangspunkt fur ein genaueres Abzielen auf regionale Reserven fur Industriesektoren in den jeweiligen Regionalwirtschaften dar.Foreign Manufacturing, Input-OUTPUT Tables, Economic Impacts,

Re-investment and the survival of foreign-owned plants

“…As regards agglomeration, it is known that FDI plants concentrate by activity, which is true of the US (Coughlin and Segev, 2000;and Kim et al, 2003), the UK (Brand et al, 2000) and elsewhere (Guimaraes et al, 2000). It is also true of the study area, where two-thirds of the FDI plants are engaged in manufacturing, half of which are in just four 2-digit activities.…”

“…Most of the FDI is in manufacturing, which is like the other peripheral British regions in receipt of regional policy (Brand et al, 2000), although unlike the core region of South-East England. The total number of FDI projects and associated jobs in the region relative to the rest of the UK is shown in Table 2.…”

Inward Investment, Employment and Government Policies in Wales

“…Yet, although the indirect employment supported by each foreign subsidiary job is higher than for domestically owned businesses, total employment per pound sterling of output is generally lower in peripheral regions (BRAND et al, 2000). IFDI can also crowd out domestic investment in such regions, leading to negative indirect employment effects (DE BACKER and SLEUWAEGEN, 2003;DRIFFIELD and HUGHES, 2003).…”

Inward investment, transaction linkages and productivity spillovers

“…Moreover, there is an apparent consensus that low levels of input-output linkages between the foreign and domestic sectors are an impediment to cluster development, a theme which is increasing in importance in several UK regional development agency strategy documents. Indeed there is more general evidence purporting to demonstrate that those foreign investors with the lowest rates of local linkages contribute least to regional growth prospects and competitiveness (Crone and Roper 1999; see also Brand et al 2000). There is then an underlying assumption that higher levels of transactions linkages between foreign and domestic firms are beneficial to the domestic sector, with an implicit recognition that the intensity of input-output linkages encourage knowledge and technology spillovers to indigenous sectors.…”

“…With limited information, the coefficients reflect the activities of all industries (foreign-owned and domestic), with some expectation that these relationships will differ between domestic and foreign industries (Brand et al, 2000). However, the purpose of this analysis was to generate a general measure of linkages between industry groups.…”