Co-operation and Outsourcing in the Global Economy
New Perspectives on the Modern Corporation series
Edited by Mario Morroni
Chapter 10: Manufacturing Abroad While Making Profits at Home: The Veneto Footwear clothing industry
10. Manufacturing abroad while making proﬁts at home: the Veneto footwear and clothing industry Carlo Gianelle and Giuseppe Tattara INTRODUCTION 10.1 Globalization has brought about a sharp increase in the real and ﬁnancial integration of the worldwide economy. In this closely knit context the outsourcing of some of the productive and trade activities abroad becomes the focal point of the policies followed by ﬁrms in order to face competition on international markets. The shift of manufacturers towards countries with lower labour costs was underlined by some experts at the beginning of the 1970s, and especially involved countries with relatively high labour costs such as the USA, Germany, Sweden, Denmark and UK (Ádám 1971; Finger 1976, 1977). Over the past decades the capacity of manufacturing ﬁrms to slice the production cycle without incurring high diseconomies has given large impetus to production globalization and has driven ﬁrms in countries, like Italy, with salaries lower than those in the USA and Northern Europe, to look for lower production costs abroad. Additionally the participation of Eastern European countries, Russia and China in the international consumption market has provided a further incentive to transfer the manufacturing processes abroad by locating outposts in areas close to markets with high sales potential. To determine the degree of internationalization of a ﬁrm is not an easy task: the usual measure is the value of the direct overseas investments made to set up a new company abroad, or to purchase one already in existence. Italian overseas investments...
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