MNE Supply Linkages and the Local SME Sector: Evidence from Yorkshire and Humberside

Abstract

This paper draws on evidence from a new survey of large MNE-owned manufacturing plants in Yorkshire and Humberside and questions the expectation that MNE plants will stimulate the local SME sector though local sourcing of material and component inputs. MNE plants in Yorkshire and Humberside sourced less than 25 percent of their material and component inputs from the local region and less than two percent from local SMEs. Smaller MNE plants were more likely to source from local SMEs as were MNE plants searching for low technology inputs, in sectors such as mechanical engineering and metal goods. MNE plants in the chemicals and motor vehicle component sectors had few local SME suppliers.