As can be seen, concentration of production makes most sense when: • Differences between countries in factor costs, political economy, and culture have a substantial impact on the costs of manufacturing in various countries. • Trade barriers are low. • Externalities arising from the concentration of like enterprises favor certain locations. • Important exchange rates are expected to remain relatively stable. • The production technology has high fixed costs and high minimum efficient scale relative to global demand, or flexible manufacturing technology exists. • The product's value-to-weight ratio is high. • The product serves universal needs.
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