ABSTRACT
A final consideration regarding the impact of processes of market integration and rationalisation within the EU and their impact specifically on Welsh manufacturing industry is that of local embeddedness. The term ‘mobile investment’ is suggestive of the idea that multinational manufacturing investments are footloose and not tied to particular localities or regions. However, the vast bulk of multinational investment is, to an extent, tied to particular localities or regions. Many multilo-cational and multinational firms invest large amounts of time, money and human resources in establishing and maintaining production at particular locations. There will be some non-recoverable sunk costs associated with production in a particular place even for the most rationalised forms of branch plant production. To the extent that firms become attached to, or embedded in, particular production locations in this way, there will be costs involved in rationalisation, no matter how unsuccessful the particular operation is. There is ample evidence to suggest that corporate rationalisation strategies are (at least partly) cognisant of such costs of withdrawing from particular production locations (Clark, 1994).
