Question
Labor-intensive firms, mainly in the apparel and footwear industries, choose to outsource production to countries where labor is abundant (primarily Southeast Asia and the Caribbean).
Labor-intensive firms, mainly in the apparel and footwear industries, choose to outsource production to
countries where labor is abundant (primarily Southeast Asia and the Caribbean). However, those firms
do not integrate with their suppliers there. Firms that utilize a more capital-intensive industry, on the
other hand, choose to integrate with their suppliers. Explain some possible differences between these
two industries. What would explain these choices?
This is from the Chapter of Firms in the Global Economy from the book of International Economics by Paul Krugman.
Please help with this question.
Thankyou!
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