The impact of direct foreign investment upon industrial structure. A case study of the uk electrical and instrument engineering industry: A reappraisal of the model of industrial structure incorporating the impact of direct foreign investment, utilising empirical evidence from a survey of the electrical and instrument engineering industry.

摘要

With the development of multinational corporations,udthe United Kingdom has experienced increasing penetrationudof its economy by foreign affiliates. This is particularlyudnoticeable in high technology industries such as Electricaludand Instrument Engineering.udThe thesis identifies the mechanism by which directudforeign investment can influence industrial structure inudsuch an industry; charts the effects within the UKudElectrical and Instrument Engineering Industry; and identifiesudthe extent to which this impact varies with theudnationality of the investor.udThe study begins with a synthesis of the comprehensiveudand complex material available upon industrial/marketudstructure and direct foreign investment.udChapters 2 and 3 demonstrate that the structure ofudElectrical and Instrument Engineering has changed significantlyudsince the inter-war years. Productive capacityudhas expanded faster than that of any other UK industry.udThroughout the minimum-list-headings of the industryudmarket power has become more concentrated in the hands ofudthe largest companies. Individual affiliates now displayudgreater product specialisation and vertical integration,udwhilst the level of entry barriers has risen steadily.udThe model presented in chapter-3 hypothesises thatuddirect foreign investment can be related to industrialudstructure in three distinct ways. Firstly, that a relationshipudexists between the distribution of foreign affiliatesud11 25 Iudand the structural characteristics of the industries inudwhich they operate. Secondly, that a similar relationshipudexists across the minimum-list-headings of each individualudindustry. Thirdly, that the operating characteristics ofudforeign affiliates in any individual minimum-list-headinguddiffer from those of domestic companies. The first two ofudthese are termed the Destination impact, and the third theudBehavioural impact of direct foreign investment.udThe results of a survey of over 500 British andudforeign owned companies, sub-divided by origin and size,udsuggest that foreign affiliates have contributed significantlyudto the changing structure of Electrical and InstrumentudEngineering both in their destination and behaviour.udThe destination of foreign investors was significantlyudrelated to areas displaying the fastest growth of productiveudcapacity; imperfection of competition; technologicallyudspecialised and vertically integrated operations; and highudbarriers to entry.udThe behaviour of individual foreign affiliates wasudfound to differ significantly from that of their UKudcounterparts (including affiliates of UK multinationals).udForeign owned companies exhibited high levels of sales. growthudand efficiency; a disproportionate impact upon the distributionudof market power; greater product specialisation and levelsudof vertical integration; and a significant contribution toudthe level of entry barriers. This influence was compoundedudby a greater productivity and profitability in the foreignudaffiliate; a differing pattern of geographical location toudthat of UK owned establishments; and a domestic reaction byudUK companies and the government to foreign penetration.udVariations within the foreign group were related toudgeographical origin. The total operations of US affiliatesudwere most significant, but investors from EEC countriesuddisplayed characteristics which varied most from those ofudUK companies. The study concludes by relating changes inudindustrial structure to the presence of foreign affiliates,udand outlining the implications of further foreign involvement