The Domestic and Foreign-Owned Sectors of Scottish Manufacturing: A Macroeconomic Approach to Their Relative Performance and Prospects.

The Scottish economy has experienced relative and, since 1974, absolute declines in manufacturing activity. Using econometric specifications which relate manufacturin g output to total domestic U.K. and world demand, the authors demonst rate that this is a serious regional problem, despite the offsetting benefit of increased primary production. In particular, it is shown t hat the relatively buoyant and responsive foreign-owned sector of man ufacturing is "in retreat" in a macroeconomic sense. Projections, u sing plausible assumptions, indicate crisis conditions may occur in t he mid-1990s in the absence of large increases in service activity or some kind of regional initiative by governmental agencies. Copyright 1988 by Scottish Economic Society.