Technological Innovation and Geographic Organization: Choice of Production
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.
Volume (Year): 3 (2011)
Issue (Month): 1 (March)
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