NOTE ON EXCHANGE RATE FLUCTUATIONS AND THE FOREIGN‐OWNED SECTOR IN SCOTLAND
| Author | Stephen Young,Neil Hood |
| Published date | 01 February 1988 |
| Date | 01 February 1988 |
| DOI | http://doi.org/10.1111/j.1467-9485.1988.tb01031.x |
Scomh
Journnloffolincol
Economy.
Vol.
35,
No
1.
February
1988
0
1988
Scottlsh
EcOnDmlc
Society
NOTE ON EXCHANGE RATE
OWNED SECTOR IN SCOTLAND
FLUCTUATIONS AND THE FOREIGN-
NEIL
HOOD*
AND
STEPHEN YOUNG
Department
of
Marketing, University
of
Strathclyde
INTRODUCTION
The issue of the impact of foreign-owned multinationals (MNEs) on Scotland
has been explored from both macro-economic and micro-economic perspec-
tives in a number of academic studies. Some consideration has also been
given to the strategic response of MNEs to external events such as
technological change, global competition, etc. Such interest and concern is
understandable given the significant contribution of the foreign-owned sector
to the Scottish economy; and the present note is
in
a similar vein, examining
in a preliminary way the impact of and MNE response to the depreciation of
sterling against the
US
dollar and to a lesser extent the Japanese yen during
1984
and the early months
of
1985.
More generally the note is relevant to the
whole question of currency volatility and the multinational sector in Scotland.
BACKGROUND
AND
METHODOLOGY
The small-scale study,
on
which this note is based, was undertaken
on
behalf
of
the Scottish Development Agency during the months March-May
1985
as background to the Agency's inward investment attraction efforts and
their encouragement of existing MNE subsidiaries within Scotland. It was
recognised that the currency changes taking place during this period were
having major effects
on
the operations
of
multinationals, particularly
American MNEs, but it was also acknowledged that not all
of
the effects
were readily predictable, whether positive
or
negative in balance.
Since the research was exploratory
in
nature, the sample was chosen
so
as
to
give as wide a range of experience as possible. Seventeen companies-13
American, 1 Canadian, 1 Continental European and
2
Japanese-were
selected from a
mix
of industries, albeit with some bias towards electronics in
view of inward investment interests. Both recently established and longer
established firms were included
in
the sample. The study was based
on
personal interviews at plant level
in
Scotland, with interviewees
in
the main
being plant
or
financial controllers, although
on
occasion plant managers and
'At
time
of
writing Neil Hood was on secondment as Director, Locate in Scotland,
Scottish Development Agency. The views in the paper are personal and are not
to
be
construed as reflecting government policy.
Date
of
receipt
of
final manuscript:
7
July
1987.
77
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