An Analysis of Offshoring Costs in the Textile and Chemical Industries

摘要

Recently, offshoring of production, i.e. the relocating of production steps to foreign countries, has become increasingly important. Not only multinational enterprises enjoy the benefits of international production networks; also smaller and medium-sized companies are operating internationally. Fragmentation and relocation of production steps help companies to discover wage advantages across the world, to enter new markets and to gain access to new customers or resources. Theoretical approaches have tried to explain such relocation activities by looking at the offshoring costs for individual production tasks, regardless of which industry they belong to. This paper, in contrast, deals with whole production process in different industries, such that the offshoring costs in different industries can be ascertained. I show that, due to different costs, offshoring activities differ among industries, e.g. the textile and chemical industries.