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Copyright © Cambridge Political Economy Society

research-article

Manufacturing demand for business services

Patrick N. O'Farrell*

*Department of Economics, Heriot-Watt University UK

Abstract

This paper analyses the demand by manufacturers in Scotland and South East England for key strategic business services during the three years 1988–19901 within the framework of the flexible firm paradigm. A series of hypotheses concerning the demand for business services is developed and tested. Evidence suggests that expansion of demand is the primary cause of increasing business service output and not restructuring strategies as predicted by the flexible firm model. Both externalisation and internalisation of business services are occurring simultaneously; the net balance is consistent with a marginal trend towards vertical integration in manufacturing and a stronger one in business services.

Manuscript received February 15, 1993; final version received August 20, 1993.


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