Manufacturing branch plants as sources of new job creation: Evidence from Devon and Cornwall

Abstract

This paper examines the job creation impacts of incoming branch factory establishment in Devon and Cornwall. It is based on an examination of the scale of direct employment created by the population of in-moving branch units, together with a more detailed analysis of their motives for investment, the quality of employment generated and the extent to which additional dependent employment has been created through linkage and local income effects. Incoming branch units are found to have accounted directly for some 22,860 surviving jobs in 1990, or just over one quarter of total manufacturing employment in the region. Regional policy has played a central role in their attraction. While local purchasing is not high, after accounting for linkage and local income effects it is estimated that incoming branch units account for approximately 7% of total employment in Devon and Cornwall, and 31% of the region's manufacturing employment. The issue of employment quality is also examined. There is little evidence of generalised low skill levels, while evidence on branch plant growth rates and longer term evidence on the overall size of the branch plant sector reveals considerable dynamism during recent years.