Suppose a Firm Is Considering Locating a Manufacturing Facility in a Poorer

question 61

Essay

Suppose a firm is considering locating a manufacturing facility in a poorer country where wage rates are much lower than in the United States. Why would social capital be a factor in their decision to relocate? Explain in terms of the impact that a lack of social capital may have on the marginal revenue product

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Definitions:

Capital Investment

Funds spent by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment.

Land Reclamation

The process of creating new land from oceans, riverbeds, or lake beds, or restoring an area to a more usable state.

Corporate Social Responsibility

A business model that helps a company be socially accountable to itself, its stakeholders, and the public, by practicing sustainable and ethical operations.

Local Issues

Problems or concerns that affect a specific geographical area or community, often requiring local governance intervention.