Border areas: advantages and disadvantages

 By George ELIOT

Border areas along the national frontier of two countries offer both economic advantages and disadvantages for businesses to relocate / operate out of there:

Advantages:

1) Arbitrage opportunities in sourcing, procurement, recruiting, tax benefits, legislative framework.

2) Possibly lower real estate prices, resulting from lower population.

3) Access to infrastructure across the border (if insufficiently developed in the home country).

4) Opportunities to start from a clean slate (e.g. greenfield sites).

5) Competitive pressure on businesses to outperform the competition across the border.

6) Access to international development funding for "twinning" cross-border partnership projects.


Disadvantages:

1) Smaller / more sparse population.

2) Distance from capital city or main economic hubs.

3) Neglect by national authorities, including lack of infrastructure investment.

4) Security risks (not necessarily military infiltration/invasion, but more asymmetric risks such as weapons and drug trafficking).

5) Difficulties and delays in crossing the border.

Border sign (Source: Wikipedia)



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