Relocating Low-to-Medium Tech Manufacturing Activities to Developing Countries: Empirical Analysis of Taiwanese and South Korean Manufacturing Outsourcing to Bangladesh

The aim of this study is to examine the procedures and factors influencing the offshore outsourcing decision of manufacturing firms from emerging countries to developing countries like Bangladesh. The theoretical framework is developed with three categories of factors namely reduce operating cost, improve company focus, and access to world class capability. This is an exploratory study based on survey method. The data collected through a survey questionnaires from a total of 227 Taiwanese (131) and Korean manufacturing firms (96) operating in Bangladesh. The findings are analyzed using a statistical software package (SPSS) and the main tools used are factor analysis, correlation analysis and linear regression analysis. The findings reveal that some factors like capital investment, fixed cost, entering new (third) markets, and access to local capabilities, invention and innovation influence Taiwanese and Korean low and mid-tech manufacturing firmi¯s outsourcing decision to low labor cost country like Bangladesh with preferential access to the developed country markets for manufacturing goods.