Abstract
The purpose of this chapter is to examine the spread of high-tech manufacturing and services away from the West, and the subsequent impact on output and employment in the home country. There is a large amount of work that seeks to examine the extent to which low skill workers in high-income countries are vulnerable to competition from workers in developing countries. Initially, this literature focussed on trade as the mechanism of reallocation, assuming that firms from the developing world compete with western firms through exports. However, the focus has since moved to the relocation of activities by Western firms, to more low-cost locations. This literature is discussed in detail in Driffield and Chiang (2009), for example, who also show that countries such as Taiwan are not immune to this. However, the focus of this literature has been on the low-tech firms, seeking to relocate low-skill, low-productivity activities to low-cost locations. The purpose of this chapter is to examine the extent to which other parts of a developed economy are also vulnerable to the attractions of relocation. To this end we focus on high-tech firms, and on services as well as manufacturing.
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© 2010 Yama Temouri, Nigel L. Driffield, and Dolores Añón Higón
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Temouri, Y., Driffield, N.L., Higón, D.A. (2010). The Importance of Location: Does Outward FDI lead to Unemployment?. In: Dimitratos, P., Jones, M.V. (eds) Resources, Efficiency and Globalization. The Academy of International Business. Palgrave Macmillan, London. https://doi.org/10.1057/9780230278028_4
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DOI: https://doi.org/10.1057/9780230278028_4
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