ABSTRACT
Much of the existing theory of multinational firm location has been centred on the concept of ‘offshoring’ which typically involves the relocation of operations to low-wage areas that allow firms to be price competitive. The purpose of this chapter is to explore aspects of multinational firm location in ‘high-cost’ locations. While there are undoubtedly numerous factors that affect a firm’s decision to relocate parts of its operations to areas which are generally considered ‘high-cost’, the focus of this chapter is on the competitive advantages that multinationals gain by having some kind of local market presence. Specifically, the chapter addresses both the perceived and actual business advantages gained from local market presence by the Japanese electronics industry in Europe.
