Why Do Companies Based in Developed Countries Locate Their Production

question 149

Short Answer

Why do companies based in developed countries locate their production facilities in underdeveloped countries?

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Definitions:

Cost of Capital

The rate of return that a company must earn on its investment projects to maintain its market value and attract funds, including the cost of debt and equity financing.

Market Supply

The total amount of goods or services that are available for purchase within a specific market at a given time.

Competitive Market

A market structure characterized by a large number of buyers and sellers, where no single entity can influence the market price.

Market Prices

The amount of money that a buyer is willing to pay and a seller is willing to accept for a good or service in a competitive marketplace.