January 31, 2005

Relocation from the Netherlands; motives, consequences and policy

Verplaatsing van bedrijfsactiviteiten naar lagelonenlanden heeft voordelen en hooguit bescheiden nadelen

Press release
Op de lange termijn en voor Nederland als geheel is verplaatsing van bedrijfsactiviteiten als goederenproductie en programmeerwerk naar lagelonenlanden gunstig. De beroepsbevolking van elk land kan dan worden ingezet voor het werk dat de grootste toegevoegde waarde oplevert.

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The motives for relocation are to be found in the benefits that it offers firms. Through relocation, firms exploit cost differences between countries and get better access to customers and suppliers. The benefits of relocation contribute to real income in the Netherlands.

There are also potential costs. One concern is that relocation towards low-wage countries will lead to unemployment, especially among low-skilled workers. In practice, this concern is hardly relevant. In general, the costs of relocation seem modest.

Given existing policies to improve the economic structure, specific policies to keep economic activities in the Netherlands are as a rule not necessary. Often such specific policies will not be effective either.

This publication is in Dutch.

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