The "flying geese" theory of development has long served as the basis of policy formulation and analysis of post-World War II economic relations between industrialized nations and developing countries. The fundamental idea is that both sides benefit from a vertical division of labor across national borders.
When a country's economic development reaches a certain level and people's income rises, such production costs as labor and land get pushed up, rendering the manufacture and provision of low-value-added goods and services unprofitable.
As a result, economic activities in those areas will be transferred to less-developed countries where production costs are cheaper. Frictions between countries often arise during this process.