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Keywords International business, Location, Delphi method
Abstract Only a limited amount of research has been reported on factors influencing international location decisions for contemporary manufacturing operations. In this paper a comprehensive set of factors that may influence international location decisions is identified from an analysis of the existing literature. Results are presented from a Delphi study that used a worldwide panel of experts to investigate factors affecting international location decisions. Findings are reported on the motivations of firms in seeking to manufacture across national borders and the key steps that should be followed in making international location decisions. The top five major factors identified that may strongly influence international location decisions generally were: costs, infrastructure, labour characteristics, government and political factors and economic factors. Ten key sub-factors identified were: quality of labour force, existence of modes of transportation, quality and reliability of modes of transportation, availability of labour force, quality and reliability of utilities, wage rates, motivation of workers, telecommunication systems, record of government stability and industrial relations laws. Additional sub-factors of increasing importance include: protection of patents, availability of management resources and specific skills and system and integration costs. The factors identified have implications for management practice, for policy-making by governments and other agencies and for academic research in international operations.
Introduction
Making location decisions for the production of products is a key aspect of strategic and logistical decision-making for manufacturing firms. The optimum locations may offer competitive advantage and may contribute to the success of an enterprise. The number of firms considering location on a worldwide basis continues to increase (Flaherty, 1996). A very wide range of factors may potentially influence firms in deciding to locate production facilities across national boundaries. A great deal of attention has been paid in the research literature to critical factors in industrial location decisions for over a century (Jungthirapanich and Benjamin, 1995). However, the literature specifically on international location decisions is more limited. Only a limited amount of research has been reported that discusses the factors recognised, and considered in practice, in international location decisions (Badri et al., 1995; Eenennaam and Brouthers, 1996; Atthirawong and MacCarthy, 2001). The study reported here addresses this gap in knowledge on international location decisions.
In this paper, we identify...