The influence of government upon multinational company manufacturing location decisions

Abstract

With the rapid changes taking place in international manufacturing, there is a need for new theories linking the drivers for manufacturing location decisions to the influence of government. A Delphi study in 2017 of senior industrialists in Europe from capital intensive, complex technology manufacturing sectors provided evidence on the importance of government-specific factors for final location decisions. This was because of the influence of government policies as an exogenous factor on the drivers for international manufacturing, including cost effective, flexible supply chains and the use of the new technologies of Industry 4.0, in an uncertain global political climate. The findings are used to develop a new theoretical framework comprising the decision onion and the government policy matrix for multinational company manufacturing location decisions. This systematic approach to the influence of government will assist in the development of policy in the post-Covid 19 era of transformational change in industrial location strategies.

Navigating the Relocation Trend: The Rising Shift of Multinational Corporations from China to Other Countries

“…Assabane (2021) and Lin et al (2021) further emphasize the need for companies to consider various factors, including the specifics of the relocation process and the potential benefits of smart and innovative delocalization practices. Ekhart and Breese (2022) further underscore the influence of government policies on these decisions, particularly in the context of costeffective supply chains and new technologies.…”