POLS 3790 Lecture Notes - Lecture 14: Product Lifecycle, Comparative Advantage, Foreign Direct Investment
1 Mar 2017
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Document Summary
Outbound foreign direct investment (fdi) flows and decisions raise questions about local adjustment in the investing and receiving country. New fdi host-countries across the global south have has to consider whether or not they are adequately capturing high value-added activities and developing "virtuous circles" of fdi. The offer of concessions and incentives to attract foreign investors can have economic benefits and social benefits: numbers and trends. Global value chains have increased in magnitude and become increasingly fragmented during the recent period: why production is globalizing. Technology has enabled new forms of business organization and shrunk the key barriers of space, time and distance. The digital revolution and the shift to modular production have also made it possible to separate and scatter various value-adding activities across the globe: governance. The governance of global value chains can be executed through pure market relations, through the hierarchal control of foreign operations or somewhere between the two poles: global value chains.
