Local presence and international manufacturing configurations in technology-intensive industries

Citations of this article
Mendeley users who have this article in their library.
Get full text


In this paper, we explore one explanation of the impact of local manufacturing presence through local customers on the configurations of international manufacturing plants established by technology-intensive rivals. In order to motivate interest in international plant configurations and this demand-side assumption, we first describe some of the stylized features of competition in the early stages of the international development of the integrated circuit industry. We then present a model incorporating the positive impact of local manufacturing presence on local sales. We show that the model is sufficient to explain a variety of different patterns of international manufacturing configurations and worldwide market shares. Under certain broad conditions, duopolists locate their plants in different countries and avoid head-to-head competition. However, this tendency to avoid rivals can be reversed by asymmetries in market sizes, crowding caused by a shortage of foreign markets when start-up costs are relatively low, first mover disadvantages in start-up costs, trade protection, and an industry marginal revenue that rises, rather than declines, with multiple local plants. © 1990.




Flaherty, M. T., & Raubitschek, R. S. (1990). Local presence and international manufacturing configurations in technology-intensive industries. Japan and The World Economy, 2(4), 301–326. https://doi.org/10.1016/0922-1425(90)90015-K

Register to see more suggestions

Mendeley helps you to discover research relevant for your work.

Already have an account?

Save time finding and organizing research with Mendeley

Sign up for free