Specific Factors of Global Production Networks

As Verter and Dincer (1995, p. 265) point out, availability and cost of production factors such as labor, raw materials and manufacturing technologies vary strongly between countries. On top of that, global network design 

309) can lead to a decrease of profits by almost 50% if capacity constraints do not allow the company to re-allocate production volumes within the network. Similarly, Vidal and Goetschalckx (1996, pp. 17-18) demonstrate that optimal network design solutions are strongly affected by exchange rates. 

Intermediates imported from China to Germany (tariff 3%) 

Finished product sold from Germany to Japan 

Duty drawback in Germany due to re-export in different condition 

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