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Industrial Organization in China: A Case Study of Foxconn's Factory Relocations

  • Author(s): Cai, Siyu
  • Advisor(s): Fan, C.Cindy
  • et al.
Abstract

In 2010, Foxconn, the world's largest electronics manufacturer, started relocating its factories from Guangdong toward the interior regions in China. The company has since built large production sites in three key inner cities--Chengdu, Zhengzhou, and Wuhan--as well as moved to smaller cities in the interior. The forces behind Foxconn's factory relocations can be understood through an analytical study that connects Foxconn's industrial organization to the Chinese governance structure. My core argument is that Foxconn's factory relocations are driven by a set of social relationships created by the multifaceted interactions between the company's industrial organization and China's governance structure. Foxconn's vertical integration, the highly skewed relationship in the electronics manufacturing industry, and the close relationship between Foxconn and local governments in China are the most significant social relationships driving the relocations.

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