Most firms in the apparel and footwear industries choose to outsource production to countries where labor is abundant? (primarily, Southeast Asia and the ?Caribbean)long dash —but those firms do not...

Most firms in the apparel and footwear industries choose to outsource production to countries where labor is abundant? (primarily, Southeast Asia and the ?Caribbean)long dash

—but those firms do not integrate with their suppliers there On the other? hand, firms in many?capital-intensive industries choose to integrate with their suppliers

What could be some differences between the? labor-intensive apparel and footwear industries on the one hand and? capital-intensive industries on the other hand that would explain these? choices?

A multinational may prefer to

A

outsource to an independent foreign firm if it is concerned about weak property rights in foreign? countries, which is more likely to be the case in? labor-intensive industries

B

use a foreign affiliate if it wants to benefit from economies of scale as a result of the affiliate performing narrow parts of the production process for many different parent? firms, which is more likely to be the case in? capital-intensive industries

C

use a foreign affiliate if it has a proprietary technology that it is concerned about?losing, which is more likely to be the case in? capital-intensive industries

D

outsource to an independent foreign firm if it doubts the ability of other firms to produce as efficiently as it? could, which is more likely to be the case in?labor-intensive industries