How does international competition affect overseas outsourcing? While it is commonly believed that international competition enables firms to desert high cost countries in favor of low wage locations, the frequency of such responses may be reduced if the movement of outsourcing activities...

Recent theories of economic geography suggest that firms in the same industry may be drawn to the same locations because proximity generates positive externalities or 'agglomeration effects.' Under this view, chance events and government inducements can have a lasting influence on the...