Why firms relocate their production overseas? The answer lies inside: corporate, logistic and technological determinants

Jesús Lampón, Pablo Cabanelas-Lorenzo () and Santiago Lago-Peñas
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Pablo Cabanelas-Lorenzo: University of Vigo

No 2013/3, Working Papers from Institut d'Economia de Barcelona (IEB)

Abstract: The paper analyses the drivers of international production relocation using a model built on intra-corporate factors. The results of an empirical research on an original and thorough data base for the Spanish automobile parts sector over the period 2001-2008 show the impact of corporate restructuring strategies on flexibility for transferring resources overseas. In particular, the larger the number of alternative plants in other countries, the greater the operational flexibility and, therefore, the more likely relocation will be. Second, lean supply requirements and technological complexity in the product or process at production plant level are both serious barriers to mobility. Finally, our results confirm that sunk costs are irrelevant in comparison with corporate factors.

Keywords: International production relocation; corporate strategy; lean supply; technology (search for similar items in EconPapers)
JEL-codes: F2 F23 L2 L23 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2013
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