FARE 3310 Lecture Notes - Lecture 9: Wage, Workforce Productivity, Absenteeism

• School: University of Guelph
• Department: Food, Agricultural and Resource Economics
• Course: FARE 3310
• Professor: Predrag Rajsic

Document Summary

Factors that affect location decisions: market economics, better international communications, more rapid, reliable travel and shipping, ease of capital flow between countries, high differences in labour costs. Labour productivity: labour cost per unit= labour cost per day/ production in units per day. Exchange rates and currency: unfavourable exchange rates can negate all profits. Costs: tangible costs- readily identifiable and can be measured with some precision ex. labour, utilities. Intangible costs- category of location costs that cannot be easily quantified, such as quality of life and government: ethical issues- do companies owe long-term allegiance to a particular country if they are losing money ex. sweatshops. Political risk, values, and culture: governments attitudes towards private and intellectual property, zoning, pollution, and employment stability, worker values may differ regarding turnover, unions, absenteeism etc, cultural variations ex. bribery in some areas. Proximity to markets: locating near customers, especially when shipping goods is expensive.