ABSTRACT
In the globalizing world of the 1990s, firms are increasingly carrying out their sourcing, assembly and production of parts for their products in foreign countries. This has led to the issue of product ‘transplants’, a common example being that of Japanese automobile transplants in Europe and the United States. More recently, as the yen has strengthened continuously, Japanese manufacturers are moving into Asian developing countries to take advantage of the region’s low wages. This chapter analyses the implications of product transplants from the viewpoint of consumers and welfare, using the Japanese case as an example.
