Abstract

Service demand by manufacturing enterprises: the influence of organisational factors and locational environment on the range of selected industrial service linkages Manufacturing enterprises require a multitude of services from other enterprises for production as well as for administration. They have their machines serviced, for instance, and turn to repair firms in cases of technical faults. They employ an accountant to balance their books at the end of the year, seek the advice of a lawyer in legal matters, make contacts with banks for financial transactions and the taking up of credit etc. Not all manufacturing enterprises make equal use of the services of outside service firms, and they also differ greatly in the choice of location of business services suppliers. Whilst some manufacturing enterprises make use of supplies offered within their own locality, others increasingly seek contact with service industries in centres further afield. It is the aim of this paper to examine the influence of firms' characteristics as well as exogenous factors on the choice of location of business service suppliers for some services required by manu facturing enterprises. In contrast to investigations so far available, the question will be looked into of which variables are responsible for the most persistent effect on linkage patterns of service links. On the basis of empirically collected service relationships of 270 firms it is possible to prove that two enterprise qualities in particular are of great importance for the extent of local demand: the type of ownership and the size of the undertaking. External influences, too, are important, in so far as they seize on the actual location of the manufacturing enterprise in an urban or rural environment. The consequences for regional policies resulting from this investigation can be summarized as follows: (i) branch plants do not release growth impulses for the local service sector, small autonomous enterprises being more suited for that purpose; (ii) great local demand for services by manufacturing enterprises located in larger centres has in turn considerable multiplier effects for the existing service sector.

Full Text
Published version (Free)

Talk to us

Join us for a 30 min session where you can share your feedback and ask us any queries you have

Schedule a call