With the development of multinational corporations,
the United Kingdom has experienced increasing penetration
of its economy by foreign affiliates. This is particularly
noticeable in high technology industries such as Electrical
and Instrument Engineering.
The thesis identifies the mechanism by which direct
foreign investment can influence industrial structure in
such an industry; charts the effects within the UK
Electrical and Instrument Engineering Industry; and identifies
the extent to which this impact varies with the
nationality of the investor.
The study begins with a synthesis of the comprehensive
and complex material available upon industrial/market
structure and direct foreign investment.
Chapters 2 and 3 demonstrate that the structure of
Electrical and Instrument Engineering has changed significantly
since the inter-war years. Productive capacity
has expanded faster than that of any other UK industry.
Throughout the minimum-list-headings of the industry
market power has become more concentrated in the hands of
the largest companies. Individual affiliates now display
greater product specialisation and vertical integration,
whilst the level of entry barriers has risen steadily.
The model presented in chapter-3 hypothesises that
direct foreign investment can be related to industrial
structure in three distinct ways. Firstly, that a relationship
exists between the distribution of foreign affiliates
11 25 I
and the structural characteristics of the industries in
which they operate. Secondly, that a similar relationship
exists across the minimum-list-headings of each individual
industry. Thirdly, that the operating characteristics of
foreign affiliates in any individual minimum-list-heading
differ from those of domestic companies. The first two of
these are termed the Destination impact, and the third the
Behavioural impact of direct foreign investment.
The results of a survey of over 500 British and
foreign owned companies, sub-divided by origin and size,
suggest that foreign affiliates have contributed significantly
to the changing structure of Electrical and Instrument
Engineering both in their destination and behaviour.
The destination of foreign investors was significantly
related to areas displaying the fastest growth of productive
capacity; imperfection of competition; technologically
specialised and vertically integrated operations; and high
barriers to entry.
The behaviour of individual foreign affiliates was
found to differ significantly from that of their UK
counterparts (including affiliates of UK multinationals).
Foreign owned companies exhibited high levels of sales. growth
and efficiency; a disproportionate impact upon the distribution
of market power; greater product specialisation and levels
of vertical integration; and a significant contribution to
the level of entry barriers. This influence was compounded
by a greater productivity and profitability in the foreign
affiliate; a differing pattern of geographical location to
that of UK owned establishments; and a domestic reaction by
UK companies and the government to foreign penetration.
Variations within the foreign group were related to
geographical origin. The total operations of US affiliates
were most significant, but investors from EEC countries
displayed characteristics which varied most from those of
UK companies. The study concludes by relating changes in
industrial structure to the presence of foreign affiliates,
and outlining the implications of further foreign involvement
| Identifer | oai:union.ndltd.org:BRADFORD/oai:bradscholars.brad.ac.uk:10454/3574 |
| Date | January 1979 |
| Creators | Newton, David J. |
| Contributors | Buckley, Peter J. |
| Publisher | University of Bradford, Postgraduate School of Studies in Management and Administration |
| Source Sets | Bradford Scholars |
| Language | English |
| Detected Language | English |
| Type | Thesis, doctoral, PhD |
| Rights | <a rel="license" href="http://creativecommons.org/licenses/by-nc-nd/3.0/"><img alt="Creative Commons License" style="border-width:0" src="http://i.creativecommons.org/l/by-nc-nd/3.0/88x31.png" /></a><br />The University of Bradford theses are licenced under a <a rel="license" href="http://creativecommons.org/licenses/by-nc-nd/3.0/">Creative Commons Licence</a>. |
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