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Development and Motives of Off-shoring Production Activities: The German Case

Author

Listed:
  • Steffen Kinkel

    (Fraunhofer ISI, Karlsruhe, Germany)

  • Petra Jung Erceg

    (Fraunhofer ISI, Karlsruhe, Germany)

Abstract

This paper examines the status quo, the development, the target and origin regions and the underlying motives of production outsourcing abroad and back-sourcing to the German location on the basis of a written survey of 1450 companies of the core sectors of the German manufacturing industry. The findings show that between 2001 and 2003 the share of companies relocating production abroad has increased. Simultaneously, the back-sourcer-outsourcer quota has been on the decrease, from 1 to 3.3 to 1 to 5.6. The new EU members have been the preferred target regions of production off-shoring activities. In 85 per cent of the cases factor costs have been one of the key criteria for the decision to relocate production abroad. The attempt to open new markets with the help of outsourcing ranks second with 40 per cent.

Suggested Citation

  • Steffen Kinkel & Petra Jung Erceg, 2005. "Development and Motives of Off-shoring Production Activities: The German Case," Zagreb International Review of Economics and Business, Faculty of Economics and Business, University of Zagreb, vol. 8(2), pages 41-60, November.
  • Handle: RePEc:zag:zirebs:v:8:y:2005:i:2:p:41-60
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    References listed on IDEAS

    as
    1. Reinhart, Carmen & Leiderman, Leonardo, 1994. "Capital inflows to Latin America," MPRA Paper 13406, University Library of Munich, Germany.
    2. Carmen M. Reinhart & R. Todd Smith, 1996. "Too much of a good thing: the macroeconomic effects of taxing capital inflows," Proceedings, Federal Reserve Bank of San Francisco, pages 436-464.
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    More about this item

    Keywords

    off-shoring; production relocation; back-sourcing; motives; employment growth;

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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