Why Have Firms Offshored Their Production Overseas?

Offshoring is a global thing. The U.S., Japan, and Korea’s production have been moved to China and South Asian countries while German production offshored to Eastern Europe, Russia, and the Ukraine.

The core reason is profits.

I have explained on numerous occasions why firms have shipped parts of their production overseas.

There has been the contention between technonationalist goal and homegrown firms’ overseas expansion.

The Korean president Lee Myung-bak emphasized social responsibilities of Korean chaebols at a meeting in July and again recently.

It should be stressed that a nation’s specific policy choice facilitates offshoring and the resulting erosion of the productive capacity, as the case of the U.S. has demonstrated.