> Another potential advantage could be, factories are closer to natural resources, but it seems to me that that's not as much a question of efficiency, as it is

> Another potential advantage could be, factories are closer to natural resources, but it seems to me that that's not as much a question of efficiency, as it is of lax (enforcement of) environmental standards. Not at all. Being close to your inputs means you don’t have to ship them as far to make use of them. And the shorter the distance you have to ship them, the less you will pay for shipping. Lower overhead equals higher efficiency. It’s like, why were car factories in the U.S. clustered around the Great Lakes? Because car factories need steel, and the steel mills were in Pennsylvania. And why were the steel mills in Pennsylvania? Because steel mills need coal, and the coal mines were in Appalachia. You could theoretically build these factories anywhere, but the company that built close to their inputs would have an economic edge over the company that didn’t.