Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Foreign companies exaggerated job targets

23.11.2004


BIG foreign companies that established UK business plants over a 14-year period exaggerated their job creation claims, a new study suggests.



Companies deliberately overstated job claims to attract business support and advice, conclude researchers from the University of Newcastle Upon Tyne Business School. The team say ambitious job creation targets can be advantageous to inward investment agencies, like regional development agencies (RDAs), and warn that such claims should be treated with “a high degree of scepticism”.

The study, published in the Oxford Bulletin of Economics and Statistics, reveals that many firms which invested in new plants in North East England – a UK boom area for foreign inward investment in the 1980s and 1990s – fell short of their job creation targets. It also reports that firms that received help for their business plants from the main investment agency at the time, Invest UK, were less likely to achieve their employment goals.


However, further research is needed to show whether a similar situation has perpetuated into the present day. This is the first detailed study of this kind of data, as the job claims of the inward investors and agencies are rarely tested, say the research team.

Newcastle University researcher, Dr Colin Wren, said: “Rather than some other explanation it seems the number of jobs may have been deliberately over-estimated. Although we only looked at the North East we suspect the findings apply to other regions and countries which benefited from inward investment, such as North West England, Wales and Scotland.

Co-researcher, Dr Jonathan Jones, said the findings implied a misallocation of public resources, adding: “Larger job scales imply better treatment from inward investment agencies, in terms of help with land, premises and other forms of assistance. “Economic development agencies benefit from claims about the number of jobs provided, especially in larger ‘flagship’ projects, which may not only bring them prestige, but potentially better grant-in-aid funding.”

The study analysed statistics relating to 265 new foreign-owned plants, which undertook 416 projects in North East England from 1985 until 1998. These mostly originated in Western Europe, the Far East and North America.

Overall, the researchers found the new plants promised a total of 48,825 jobs but total employment within the plants stood at 34,164 in 1999, a shortfall of over one-third at 15,000 jobs. Over 9,000 jobs promised were in the 50 plants that closed before 1998. Looking more closely, the team discovered that while smaller plants achieved their employment targets, the larger plants fell someway short, suggesting either the job target was not met or that jobs were lost by the end of the analysis period.

To elaborate, a large plant promising 250 jobs had only between half and three-quarters of these in place in 1999, while a plant promising 1,000 jobs had around half these jobs in place by that time.

Plants that received special financial assistance were more likely to achieve their employment targets but those involved with Invest UK were less likely to reach them. For example, on average, a plant promising around 50 jobs had more than this number in place if it received financial assistance but statistics showed it was be likely to achieve two-thirds of this target if involved with Invest UK.

Dr Colin Wren | alfa
Further information:
http://www.ncl.ac.uk

More articles from Studies and Analyses:

nachricht Self-organising system enables motile cells to form complex search pattern
07.05.2019 | Westfälische Wilhelms-Universität Münster

nachricht Mouse studies show minimally invasive route can accurately administer drugs to brain
02.05.2019 | Johns Hopkins Medicine

All articles from Studies and Analyses >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: The hidden structure of the periodic system

The well-known representation of chemical elements is just one example of how objects can be arranged and classified

The periodic table of elements that most chemistry books depict is only one special case. This tabular overview of the chemical elements, which goes back to...

Im Focus: MPSD team discovers light-induced ferroelectricity in strontium titanate

Light can be used not only to measure materials’ properties, but also to change them. Especially interesting are those cases in which the function of a material can be modified, such as its ability to conduct electricity or to store information in its magnetic state. A team led by Andrea Cavalleri from the Max Planck Institute for the Structure and Dynamics of Matter in Hamburg used terahertz frequency light pulses to transform a non-ferroelectric material into a ferroelectric one.

Ferroelectricity is a state in which the constituent lattice “looks” in one specific direction, forming a macroscopic electrical polarisation. The ability to...

Im Focus: Determining the Earth’s gravity field more accurately than ever before

Researchers at TU Graz calculate the most accurate gravity field determination of the Earth using 1.16 billion satellite measurements. This yields valuable knowledge for climate research.

The Earth’s gravity fluctuates from place to place. Geodesists use this phenomenon to observe geodynamic and climatological processes. Using...

Im Focus: Tube anemone has the largest animal mitochondrial genome ever sequenced

Discovery by Brazilian and US researchers could change the classification of two species, which appear more akin to jellyfish than was thought.

The tube anemone Isarachnanthus nocturnus is only 15 cm long but has the largest mitochondrial genome of any animal sequenced to date, with 80,923 base pairs....

Im Focus: Tiny light box opens new doors into the nanoworld

Researchers at Chalmers University of Technology, Sweden, have discovered a completely new way of capturing, amplifying and linking light to matter at the nanolevel. Using a tiny box, built from stacked atomically thin material, they have succeeded in creating a type of feedback loop in which light and matter become one. The discovery, which was recently published in Nature Nanotechnology, opens up new possibilities in the world of nanophotonics.

Photonics is concerned with various means of using light. Fibre-optic communication is an example of photonics, as is the technology behind photodetectors and...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

VideoLinks
Industry & Economy
Event News

SEMANTiCS 2019 brings together industry leaders and data scientists in Karlsruhe

29.04.2019 | Event News

Revered mathematicians and computer scientists converge with 200 young researchers in Heidelberg!

17.04.2019 | Event News

First dust conference in the Central Asian part of the earth’s dust belt

15.04.2019 | Event News

 
Latest News

Novel communications architecture for future ultra-high speed wireless networks

17.06.2019 | Information Technology

Climate Change in West Africa

17.06.2019 | Earth Sciences

Robotic fish to replace animal testing

17.06.2019 | Ecology, The Environment and Conservation

VideoLinks
Science & Research
Overview of more VideoLinks >>>