The multiplier effect with reference to Newport and Setubal

build them, providing even more jobs. If it is a manufacturing industry, then other industries may set up nearby to keep transport costs down. A good example of the multiplier effect is in the region of Portugal called Setubal. The carmakers Ford and Volkswagen decided to build a £1.7billion car manufacturing plant in the area, which created three thousand jobs. Along with the plant, a dock needed to be renovated and roads needed to be built, creating more jobs. As a car factory assembles parts, some factories were setup nearby, for example a metal works. These new jobs meant that some people, who had out-migrated to places like Switzerland, were able to move back to Portugal. This influx of people to the surrounding area brought in some more money so more shops/services were able to locate there because their thresholds could now be reached. A similar sort of thing would have happened in Newport in South Wales when the Korean electronics giant LG Electronics decided to build two factories in the area. This would have caused many other factories and services to set up in the area, creating thousands of jobs and making the area much more prosperous. Unfortunately, because of the recession in the Far East, LG Electronics lost lots of money and only one of the factories was ever built, so it did not have the desired effect on the area, although it did partially help the area.