ABSTRACT
In this chapter, the authors present an exposition of their understanding of how firms delocalize. They describe conceptual framework of the impacts of delocalization on development and explore an empirical assessment. The authors discuss the inner working of the organization of production and its implications for development. They analyse how the basic dimensions of their analytical framework affect the decision to delocalize. Considerably more Bulgarian and Polish firms appear to have benefited from delocalization, although in quite different ways. Concerning the former, the vast majority of respondents went through some type of product upgrade. Delocalization ‘comes’ from Greece, but the lead firms and the main market are German. The creation, enhancement and appropriation of value bring us to the second key question, which is how delocalization affects growth. The authors examine the impacts of delocalization on development through the use of some stylized examples.
