Most firms in the apparel and footwear industries choose to outsource production to countries where labor is abundant​ (primarily, Southeast Asia and the​Caribbean)long dash—butthose firms do not integrate with their suppliers there. On the other​ hand, firms in many​ capital-intensive industries choose to integrate with their suppliers. What could be some differences between the​ labor-intensive apparel and footwear industries on the one hand and​ capital-intensive industries on the other hand that would explain these​ choices?A multinational may prefer to

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Asked Oct 28, 2019
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Most firms in the apparel and footwear industries choose to outsource production to countries where labor is abundant​ (primarily, Southeast Asia and the
​Caribbean)long dash—but
those firms do not integrate with their suppliers there. On the other​ hand, firms in many​ capital-intensive industries choose to integrate with their suppliers.
 
What could be some differences between the​ labor-intensive apparel and footwear industries on the one hand and​ capital-intensive industries on the other hand that would explain these​ choices?
A multinational may prefer to
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Expert Answer

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Apparel and footwear industry is labor-intensive and most of their cost includes wages paid to laborers that is why they try locating in the places where labor is abundant and cheap. Technology does not play a major part in their production and they have their special...

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