Question

Why do U.S. corporations build manufacturing plants abroad when they can build them at home?

Solution

Verified

U.S corporations build manufacturing plants in other countries for various reasons-

-Labor is typically cheaper in other countries, especially third world/developing countries.

-Expanding their market to other countries, not just the United States. If a firm decides to manufacture their goods in another country they could also start selling them abroad.

-Close proximity to raw materials. A manufacturer may choose to build a plant in a certain region because the raw materials needed are close by.

-Loose governmental regulations. In some countries, especially in the developing world, the regulations put in place by the government may be much more relaxed than rules in the States.

Create an account to view solutions

By signing up, you accept Quizlet's Terms of Service and Privacy Policy
Continue with GoogleContinue with Facebook

Recommended textbook solutions

Fundamentals of Corporate Finance 7th Edition by Alan J. Marcus, Richard A. Brealey, Stewart C. Myers

Fundamentals of Corporate Finance

7th EditionAlan J. Marcus, Richard A. Brealey, Stewart C. Myers
807 solutions
Corporate Finance 4th Edition by Jonathan B. Berk, Peter DeMarzo

Corporate Finance

4th EditionJonathan B. Berk, Peter DeMarzo
1,224 solutions
Corporate Finance 4th Edition by Jonathan B. Berk, Peter DeMarzo

Corporate Finance

4th EditionJonathan B. Berk, Peter DeMarzo
1,224 solutions
Fundamentals of Financial Management, Concise Edition 9th Edition by Eugene F. Brigham, Joel F Houston

Fundamentals of Financial Management, Concise Edition

9th EditionEugene F. Brigham, Joel F Houston
1,204 solutions

Related questions