Question

According to Vernon, which of the following factors obviates the need for pioneering U.S. firms to look for low-cost production sites in other countries?

Answer 1

Factors such as costs of labor, proximity to suppliers and customers, and quality of infrastructure can obviate the need for pioneering U.S. firms to look for low-cost production sites in other countries.

Step-by-step explanation:

The factors that obviate the need for pioneering U.S. firms to look for low-cost production sites in other countries include:

1. Costs of labor and financial capital: Firms consider the costs of labor and capital when deciding where to locate a new factory. If the costs are favorable in the U.S., there may be no need to seek low-cost production sites elsewhere.
2. Proximity to reliable suppliers and customers: If a location in the U.S. is close to reliable suppliers and customers, it can reduce transportation costs and make production more efficient.
3. Quality of transportation, communications, and electrical power networks: A well-developed infrastructure in the U.S. can provide reliable transportation, communications, and power networks, which can be advantageous for firms.