Why locate manufacturing in a high-cost country? A case study of 35 production location decisions

Mikko Ketokivi*, Virpi Turkulainen, Timo Seppälä, Petri Rouvinen, Jyrki Ali-Yrkkö

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

45 Citations (Scopus)

Abstract

In this paper, we examine in detail 35 final assembly location decisions to gain understanding of the manufacturing location decision from strategy and economic policy perspectives. We are particularly interested in the decision to locate final assembly specifically in a high-cost (high GDP per capita) environment. In contrast with the earlier literature, we focus not just on manufacturing activities themselves, but also the key linkages between production, market, supply chain, and product development. These linkages are examined using three key concepts from theories of organization design: formalization, specificity, and coupling. Using these concepts, an analysis of the micro-structure of each case reveals important commonalities that inform our understanding of location decisions. We conclude by discussing the policy implications of our findings.

Original languageEnglish
Pages (from-to)20-30
Number of pages11
JournalJournal of Operations Management
Volume49-51
Issue numberMarch 2017
DOIs
Publication statusPublished - 2017
MoE publication typeA1 Journal article-refereed

Keywords

  • Case study
  • International operations
  • Manufacturing location decisions
  • Supply chain management

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