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The Locational and Functional Behavior of U.S. Autoparts Suppliers

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  • Ho Kim

Abstract

The free trade agreement with Mexico was expected to help U.S. autoparts suppliers move southward to take advantage of low labor cost, but this has not yet happened. We can find explanations for this rather perplexing phenomenon through analyzing the outcome of a postal survey conducted just before the North American Free Trade Agreement (NAFTA) went into effect. The responses from the suppliers highlight the apparent hierarchy in the lean produc-tion system and its impact on the location choices of the parts-manufacturing firms. Despite advances in transportation and telecommunication technologies, the need to maintain short distance with respect to customers is still the single most important consideration in their decision-making. Given the reluctance on the part of the vehicle assemblers, a mass migration of suppliers to Mexico seems unlikely, although it is true that they are quite attracted to the low wages offered south of the border. Copyright Springer Science + Business Media, Inc. 2005

Suggested Citation

  • Ho Kim, 2005. "The Locational and Functional Behavior of U.S. Autoparts Suppliers," Small Business Economics, Springer, vol. 24(1), pages 79-95, February.
    • Handle: RePEc:kap:sbusec:v:24:y:2005:i:1:p:79-95
    DOI: 10.1007/s11187-005-3099-9
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    References listed on IDEAS

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    1. Gary Clyde Hufbauer & Jeffrey J. Schott, 1992. "North American Free Trade: Issues and Recommendations," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 71, January.
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    Cited by:

    1. Frigant, Vincent & Zumpe, Martin, 2014. "The persistent heterogeneity of trade patterns: A comparison of four European Automotive Global Production Networks," MPRA Paper 60199, University Library of Munich, Germany.
    2. Vincent FRIGANT & Martin ZUMPE, 2014. "Are automotive Global Production Networks becoming more global? Comparison of regional and global integration processes based on auto parts trade data," Cahiers du GREThA (2007-2019) 2014-09, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    3. Lee, Chaehwa & Wilhelm, Wilbert, 2010. "On integrating theories of international economics in the strategic planning of global supply chains and facility location," International Journal of Production Economics, Elsevier, vol. 124(1), pages 225-240, March.

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