Factors determining the location of immigrant industry within a UK assisted area : The Scottish experience between 1945 and 1970

Henderson, Robert Anthony (1977) Factors determining the location of immigrant industry within a UK assisted area : The Scottish experience between 1945 and 1970. MLitt(R) thesis, University of Glasgow.

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Abstract

Since the war regional development policies have placed a great deal of emphasis on stimulating employment creation in the less prosperous areas of the UK by encouraging manufacturing firms to locate their new investment within such regions. Empirical studies have generally sought to identify either the employment and investment impact of government regional policy or the reasons why firms have moved production from the non-assisted into the Assisted Areas. Little attention has been given to the factors influencing the choice of location once a firm has decided to invest in a particular assisted region. Since location considerations frequently operate only at a particular geographical scale there is no certainty that the reasons for a firm's choosing a specific location coincide with those which brought it to the region as a whole. This study, unlike previous empirical work in the UK, concentrates on the factors determining a firm's choice of site within a specific Assisted Area. The analysis concentrates upon Scotland because it has been a large recipient of incoming Industry during the 1945-70 period, and is sufficiently large, in both employment and spatial terms, to be able to offer a wide choice of potential sites. During the course of this period a number of distinct trends have become apparent in the regional distribution of incoming industry within Scotland. Until about 1960 nearly three-quarters of the mobile jobs went to the West of Scotland, but thereafter that region's dominance declined noticeably as industry moved into other parts of the country. The counties of Fife, West Lothian and Stirling proved particularly successful in obtaining new industry during the 1960s, although Lanarkshire continued, to attract more new employment than any other area. A number of hypotheses are generated to try and explain the changing distribution pattern of new immigrant industry. Traditional location theory with its emphasis on transport costs and profit maximisation is considered to be of limited analytical value. Consequently the hypotheses tested in this study assume satisficing rather than maximising behaviour. Nevertheless location decisions are constrained by economic considerations so that a manufacturer will only locate within those areas where production is expected to be profitable. However, once the general area of search for a new site is identified an industrialist faced by uncertainties over future cost and market trends, possessing partial and imperfect knowledge and information, and under pressure to start production in the new plant as soon as possible, is likely to select the first suitable location. It is extremely unlikely that this will also be the place where profits can, in theory, be maximised. In practice, given all the uncertainties, it is doubtful if such a location can actually be identified. Consequently personal preferences and aspirations are likely to figure in the final choice of site. This study, using multiple regression analysis, provides support for the hypothesis that the cost of factor inputs determines the general but not necessarily the specific location selected by immigrant industry. Although the availability of labour and factory space are significant factors in every period, the perceived image of an area, by affecting a decision maker's psychic income, can also influence the location of new manufacturing plants within an Assisted Area such as Scotland. Personal considerations appear to have become increasingly important over time and a number of reasons for this trend are suggested. As spatial cost differences decline and competing areas begin to provide compara.ble facilities, so industry is able to choose from a wider range of potentially profitable locations. Changes in the spatial cost structure of factor inputs have allowed psychic cost considerations to assume a growing prominence for incoming industry. Such trends help to explain the changing distribution of new industry within Scotland during the course of the post-war period. The pronounced cost advantage formerly enjoyed by Clydeside and Dundee as a result of their labour reserves and factory space, much of it government owned or built, was steadily reduced. Labour became more generally available as unemployment rose in the 1960s, government financial assistance was extended to most of the country, and both new industrial sites and factories were widely developed within Scotland. Areas such as Glasgow, with high psychic costs, began to experience competitive difficulties in their efforts to attract new industry, unless they possessed sufficient offsetting economic advantages. Incoming firms moved into different parts of Scotland and away from many of the traditional manufacturing areas which they had previously preferred on account of their lower production costs.

Item Type: Thesis (MLitt(R))
Qualification Level: Masters
Additional Information: Adviser: John Firn
Keywords: European history, Labor relations
Date of Award: 1977
Depositing User: Enlighten Team
Unique ID: glathesis:1977-72023
Copyright: Copyright of this thesis is held by the author.
Date Deposited: 17 May 2019 13:21
Last Modified: 17 May 2019 13:21
URI: http://theses.gla.ac.uk/id/eprint/72023

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