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BMW used the strategic advantage that these unemployed East German Automotive workers at Leipzig were providing, while helping government lower unemployment through FDI. Lowering that aspect of the inputs to the value chain had injected profit to BMW’s earnings.
The Leontief Paradox states that countries that are abundant in capital should be exporters of capital intensive goods, and import labour intensive goods...
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These imports did not relieve the strain on domestic labour intensive industries. The Leontief Paradox disputes the Heckscher-Olin theory on the point that Factor endowments can be impacted by Government Policy. BMW is a good example proving that this paradox exists. Government intervention into labour rights, the shortened work week and East German re-unification problems caused excessive pressures on high labour costs...
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Bmw Drives Germany
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