The Motivations for Sourcing Production Offshore: A Multiple Case Study of Small and Medium-Sized Clothing Firms in Hong Kong

Abstract

This paper studies the factors that motivate small and medium-sized clothing firms in Hong Kong to shift their production offshore, and identifies the interrelationships between these factors and firm-related characteristics, sourcing strategies, and buyer-supplier relationships. Using a multiple case methodology to study ten firms and a two-phase approach to collecting data involving, in-depth interviews and mail questionnaires, the two most important factors motivating the sourcing of production offshore are identified, as follows: (1) cost advantage of, and (2) availability of labour in, the host country. The results also show that industrial sector and firm size are the only firm-related characteristics that have an effect on the factors motivating offshore production. Furthermore, sourcing strategies and buyer-supplier relationships are sometimes influenced by these motivational factors.