Technological convergence, globalisation and ownership in the UK computer industry

Among the causative factors that explain acquisition and ownership are firm-specific factors and factors that may be expected to influence the whole industry. With regard to the latter two important aspects of the electronics industry generally and the computer industry in particular have been the rapidity and nature of technological change in this sector and the forces of globalisation and internationalisation of production, resulting in the establishment of large numbers of subsidiaries. This paper attempts to investigate the strength and nature of technological factors in explaining ownership patterns in the UK computer sector. It also examines ownership by nationality of parent companies. The paper identifies some patterns based on a study of parent-subsidiary links in the UK computer sector, by matching subsidiary firms' principal line of activity with the parent company's line(s) of business activity. We conclude that the importance of the technological motive in acquisitions and subsidiary creation in the computer sector should not be overstated. However, the peculiar problems of accessing long-term finance for computer sector firms, together with market access and profitability considerations for parent firms, may explain the large presence of subsidiary firms in this sector. (C) 2000 Elsevier Science Ltd. All rights reserved.