External Takeovers in Scottish Manufacturing: The Effect on Local Linkages and Corporate Functions*

This paper examines the effects of the external takeover of Scottish manufacturing companies during the period 1965 to 1980. The importance of linkage -and function effects for the performance of the regional economy is highlighted. Using survey data obtained from a detailed study of twenty-five acquired companies, the net changes in linkages and functions are identified and discriminant analysis is applied to determine whether the change is associated with the particular characteristics of the takeovers. The loss of functions and linkages is found to be associated with the particular characteristics of the acquisitions, especially poor preacquisition performance and horizontal takeover.