Examination of Witnesses (Questions 358
- 359)
WEDNESDAY 24 MARCH 2004
PROFESSOR JOHN
TOMANEY, DR
COLIN WREN
AND MR
DAVID NEWLANDS
Q358 Chairman: Welcome to the Committee
this afternoon. We are grateful for you coming down from Scotland
and other places north of Newcastle. Perhaps we could begin with
introductions. Mr Newlands, perhaps for the record you could introduce
yourself.
Mr Newlands: Yes, I am David Newlands.
I am a senior lecturer in the Economics Department at Aberdeen
University. I have a long-term interest in regional economic development
and matters with regard to the arguments and implications of evolution
and of economic policy and regional development.
Professor Tomaney: John Tomaney,
Professor of Regional Governance at the Centre for Urban and Regional
Development Studies, Newcastle University.
Dr Wren: Colin Wren, Reader in
Microeconomics, University of Newcastle upon Tyne Business School.
I too have a long-term interest in economic development policy
and regional policy as well.
Q359 Chairman: Thank you. As you
can probably tell, the acoustics are not brilliant here. If you
could keep your voices up it would be appreciated. Professor Tomaney
and Dr Wren, can I ask you both what has been the effect of FDI
on the domestic manufacturing sector in the North East? Has the
dominant feature been technical spill-overs and increased productivity,
or increased competition and more closures?
Dr Wren: If we look at the issue
of spill-overs, there has been quite a bit of research done in
recent years looking at various aspects, not just productivity
spill-overs, but also other potential effects on competitiveness,
such as wages and exports. Overall there is some evidence that
foreign plants when they come into a region do have positive effects
on firms, but, broadly, overall the econometric evidence is rather
weak. These are the econometrics-based studies using data. I think
studies using more survey-based evidence where they talk to firms,
provide stronger effects, but, as a rule, the econometric evidence
for the spill-over effects on other firms is not strong.
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