MANUFACTURING DEMAND FOR BUSINESS SERVICES

This paper analyses the demand by manufacturers in Scotland and South East England for key strategic business services during the three year s 1988-1990(1) within the framework of the flexible firm paradigm. A s eries of hypotheses concerning the demand for business services is dev eloped and tested. Evidence suggests that expansion of demand is the p rimary cause of increasing business service output and not restructuri ng strategies as predicted by the flexible firm model. Both externalis ation and internalisation of business services are occurring simultane ously; the net balance is consistent with a marginal trend towards ver tical integration in manufacturing and a stronger one in business serv ices. (C) 1995 Academic Press Limited