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Technological Innovation and Geographic Organization: Choice of Production

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  • Yong Yang

    ()
    (Chongqing Three Gorges University in China)

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    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.

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    Bibliographic Info

    Article provided by Ottawa United Learning Academy in its journal Transnational Corporations Review.

    Volume (Year): 3 (2011)
    Issue (Month): 1 (March)
    Pages: 13-26

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    Handle: RePEc:oul:tncr09:v:3:y:2011:i:1:p:13-26

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    Keywords: outsourcing; innovation; risk; trust; geographic organization;

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