Why do the relative cost advantage is reduced over time

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Reference no: EM13935735

Capitalizing on low-cost labour. Some MNCs establish a manufacturing facility where there is a rel- atively low cost of labour. Yet, they sometimes close the facility later because the cost advantage dissipates. Why do you think the relative cost advantage of these countries is reduced over time? (Ignore possible exchange rate effects.)

Reference no: EM13935735

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