Production Relocation: Choice Versus Satisfaction Factors: A Preliminary Study

Abstract

ABSTRACT This article examines the satisfaction level of production relocation of export oriented firms. We introduce a conceptual model, by incorporating the Expectancy Disconfirmation Paradigm (EDP) model and the Perception model, and use Hotelling T2 statistics and paired t-test to measure management's satisfaction levels toward production at the relocated location. Most of the extant literatures focus on the choice decision of production relocation; this report, however, focuses on the manufacturer's satisfaction level toward the selected location. While location choice is an ex ante analysis, satisfaction analysis is an ex post analysis on production relocation. Findings of the study show that among the 20 location factors, political stability and sufficient industrial engineers are the best predictors of electronics manufacturers' satisfaction on production relocation. A firm may consider relocating the production again if dissatisfaction grows. This may explain, at least partly, the international movements of production relocation during the past decades.