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The impact of the global factory on economic development

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  • Buckley, Peter J.
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    Abstract

    The global factory is a structure through which multinational enterprises integrate their global strategies through a combination of innovation, distribution and production of both goods and services. The global factory is analysed within a Coasean framework with particular attention to ownership and location policies using methods that illustrate its power in the global system. Developing countries are constrained by the existence and power of global factories. Firms in developing countries are frequently constrained to be suppliers of labour intensive manufacturing or services into the global factory system. Breaking into this system is difficult for emerging countries. It requires either a strategy of upgrading or the establishment of new global factories under the control of focal firms from emerging countries. The implementation of these strategies is formidably difficult.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of World Business.

    Volume (Year): 44 (2009)
    Issue (Month): 2 (April)
    Pages: 131-143

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    Handle: RePEc:eee:worbus:v:44:y:2009:i:2:p:131-143

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    Related research

    Keywords: Global factory Transaction cost theory Globalisation Economic development Entrepreneurship Control and location;

    References

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    1. Stefanie Ann Lenway & Thomas P Murtha, 1994. "The State as Strategist in International Business Research," Journal of International Business Studies, Palgrave Macmillan, vol. 25(3), pages 513-535, September.
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    4. McLaren, J., 1996. "'Globalization' and Vertical Structure," Discussion Papers, Columbia University, Department of Economics 1996_21, Columbia University, Department of Economics.
    5. Peter J Buckley & Pervez N Ghauri, 2004. "Globalisation, economic geography and the strategy of multinational enterprises," Journal of International Business Studies, Palgrave Macmillan, vol. 35(2), pages 81-98, March.
    6. Mark Casson, 1997. "Institutional Economics and Business History: A Way Forward?," Business History, Taylor & Francis Journals, vol. 39(4), pages 151-171.
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    8. Vernon, Raymond, 1979. "The Product Cycle Hypothesis in a New International Environment," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 41(4), pages 255-67, November.
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    Cited by:
    1. Fetscherin, Marc & Voss, Hinrich & Gugler, Philippe, 2010. "30 Years of foreign direct investment to China: An interdisciplinary literature review," International Business Review, Elsevier, vol. 19(3), pages 235-246, June.
    2. Roland Bardy & Stephen Drew & Tumenta Kennedy, 2012. "Foreign Investment and Ethics: How to Contribute to Social Responsibility by Doing Business in Less-Developed Countries," Journal of Business Ethics, Springer, Springer, vol. 106(3), pages 267-282, March.
    3. Blomkvist, Katarina & Kappen, Philip & Zander, Ivo, 2014. "Superstar inventors—Towards a people-centric perspective on the geography of technological renewal in the multinational corporation," Research Policy, Elsevier, vol. 43(4), pages 669-682.
    4. Dellestrand, Henrik, 2011. "Subsidiary embeddedness as a determinant of divisional headquarters involvement in innovation transfer processes," Journal of International Management, Elsevier, Elsevier, vol. 17(3), pages 229-242, September.
    5. Buckley, Peter J., 2009. "Internalisation thinking: From the multinational enterprise to the global factory," International Business Review, Elsevier, vol. 18(3), pages 224-235, June.
    6. Hashai, Niron, 2009. "Knowledge transfer considerations and the future of the internalization hypothesis," International Business Review, Elsevier, vol. 18(3), pages 257-264, June.
    7. Kyläheiko, Kalevi & Jantunen, Ari & Puumalainen, Kaisu & Saarenketo, Sami & Tuppura, Anni, 2011. "Innovation and internationalization as growth strategies: The role of technological capabilities and appropriability," International Business Review, Elsevier, vol. 20(5), pages 508-520, October.
    8. Azar, Goudarz, 2012. "Inpatriates and Expatriates: Sources of Strategic Human Capital for Multinational Food and Beverage Firms," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IAMA), International Food and Agribusiness Management Association (IAMA), vol. 15(A).
    9. Bustillo Mesanza, Ricardo & Maiza Larrarte, José Antonio, . "EAEren eta Txinaren arteko harreman ekonomikoak: aukerak eta erronkak," Revista de Dirección y Administración de Empresas, Universidad del País Vasco - Escuela Universitaria de Estudios Empresariales de San Sebastián, Universidad del País Vasco - Escuela Universitaria de Estudios Empresariales de San Sebastián.
    10. Eriksson, Taina & Nummela, Niina & Saarenketo, Sami, 2014. "Dynamic capability in a small global factory," International Business Review, Elsevier, vol. 23(1), pages 169-180.
    11. Buckley, Peter J. & Hashai, Niron, 2014. "The role of technological catch up and domestic market growth in the genesis of emerging country based multinationals," Research Policy, Elsevier, vol. 43(2), pages 423-437.

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