Technological Innovation and Geographic Organization: Choice of Production

Yong Yang ()
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Yong Yang: Chongqing Three Gorges University in China

Transnational Corporations Review, 2011, vol. 3, issue 1, 13-26

Abstract: This paper intends to develop a model for investigating the effects of technological innovation on geographic organization choice, and some of the risks involved. An increase in profits and a reduction in resource requirements by adapting related innovation could increase motivation around the choice of geographic organization of production to minimize costs. Firms in lower-cost regions can develop the capacity to innovate through ¡®learning by doing' and increasing investment in R&D. However, outsourcing/offshoring firms bear market risks such as information leakages. This paper argues that geographic organization choice of production may benefit all factors of the source country. When offshoring/outsourcing become possible, the traditional tenets of trade will have the challenges for the situations.

Keywords: outsourcing; innovation; risk; trust; geographic organization (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:oul:tncr09:v:3:y:2011:i:1:p:13-26

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