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Modern methods of production and foreign direct investment

  • Václav Žďárek
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    The article deals with the phenomenon of globalization and in particular its influence on production chains of multinational firms. The on-going process of globalization has set off new trends and possibilities of production (e.g. outsourcing) which resulted in changes of firms´ behaviour. This led to new approaches in their decisions concerning internationalization of production process, i.e. investment abroad, mainly realised by setting-up a new production facility in a foreign country, usually in the form of the foreign direct investment (FDI). Some of these influences are also connected with new types of production and its structure. The first part of the text is devoted to a brief review of theories which may be used by explaining different ways of internalisation of firm´s production, to the latest empirical data concerning FDI and some thoughts concerning methodological problems linked to FDI statistics. The next part of the text tries to shed light on different producing methods, classification schemas and definition of selected modern forms of production and discusses possible links to the FDI. The third part of the text presents a simple model for assessing value of FDI which can be used for decision-making within a multinational firm. The last part summarises the main findings.

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    Article provided by University of Economics, Prague in its journal Politická ekonomie.

    Volume (Year): 2009 (2009)
    Issue (Month): 4 ()
    Pages: 509-543

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    Handle: RePEc:prg:jnlpol:v:2009:y:2009:i:4:id:696:p:509-543
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