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The impact of the global factory on economic development

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  • Buckley, Peter J.

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.

Suggested Citation

  • Buckley, Peter J., 2009. "The impact of the global factory on economic development," Journal of World Business, Elsevier, vol. 44(2), pages 131-143, April.
  • Handle: RePEc:eee:worbus:v:44:y:2009:i:2:p:131-143
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    References listed on IDEAS

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    1. John McLaren, 2000. ""Globalization" and Vertical Structure," American Economic Review, American Economic Association, vol. 90(5), pages 1239-1254, December.
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    7. Hans Gersbach, 2002. "Does and How Does Globalisation Matter at the Industry Level?," The World Economy, Wiley Blackwell, vol. 25(2), pages 209-229, February.
    8. Peter J Buckley & Pervez N Ghauri, 2004. "Globalisation, economic geography and the strategy of multinational enterprises," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(3), pages 255-255, May.
    9. Gereffi, Gary, 1999. "International trade and industrial upgrading in the apparel commodity chain," Journal of International Economics, Elsevier, vol. 48(1), pages 37-70, June.
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