The impact of uncertainty on production relocation: Implications from a regional perspective

Analysis of the Spanish automobile industry during the global economic crisis of 2008 shows that the number of relocations was comparatively lower than in the period before the crisis. Uncertainty weighs more in relocation decisions than the advantages that multinationals can gain from their operational flexibility. The main drivers of relocation in the sector are conditioned by relocation costs and the risks inherent in such processes. The main implication of the research is that it helps identify vulnerability in relocation under conditions of uncertainty. This is key for defining public policies aiming to avoid the impact of relocation on regions that have traditionally been affected by such processes.