Policy Review Section

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Abstract
In this issue of the Policy Review Section, Brian Ashcroft and James Love, of the Fraser Allander Institute, summarize the results of a recently completed study on the effects of the external takeover of Scottish manufacturing companies and the implications for UK mergers policy. The findings of the research suggest that while on balance mergers work to the benefit of acquired companies, nevertheless, in terms of the Scottish economy there is evidence of negative effects through the transference of key management functions and the purchase of business services outside Scotland. These findings lead to an examination of the weaknesses in present procedures for referrals of mergers to the Monopolies and Mergers Commission in relation to regional issues and suggestions as to how they should be addressed. In the second article, Paul Lovejoy, of the West Midlands Enterprise Board, examines the role of the Board in plugging a gap in the provision of long term investment finance to support management buyouts. In a region such as the West Midlands, where there is a preponderance of buyouts, Lovejoy argues that regional development agencies have a potentially valuable role to play given the wider significance of buyouts for the local economy.

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