An Analysis of the Factors Determining the Geographical Distribution of Japanese Manufacturing Investment in the UK, 1984-91

The purpose of this paper is to discover which factors have been important in determining the geographical distribution of Japanese manufacturing establishments in the UK during 1984-91. A multivariate statistical analysis is undertaken, based on the Poisson model, to investigate the inter-county variation in the number of establishments locating in each UK county during two separate time periods (1984-88 and 1989-91). In addition to examining the influence of variables such as labour costs, labour availability and industry mix on the locational choice of Japanese firms, the statistical analysis attempts to capture the influence of regional policy. Multivariate regression analysis reveals that the geographical distribution of Japanese-owned investment in the UK is only statistically associated with a small number of variables. The main explanatory variable in the model is whether an area had assisted-area status. Other key explanatory variables are those reflecting an area's industry mix.