1. Location of Production
Multinationals
and the
Location of Production
Project Link
United Nations
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4. Resource Flows to Developing Countries
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5. Netting Out M&A Activity: Developing Country FDI has Grown Steadily
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6. Winners and Losers from FDI Inflows in 2001
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7. Who Received FDI in 2001?
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8. Corporate Priorities: FDI in 2002
Most Favoured Destinations
as a Percentage of MNE Responses
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9. Determinants of FDI, Location of Production and Trade
Political Expropriation
Contracting Environment
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10. 1. Breaking Down the Value Chain
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11. FDI and the Propagation of International Shocks
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12. FDI and Deflation
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13. 2. Asset Specificity and Relationship-Specific Investments
Why is FDI
so intense
in just a handful
of industries?
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14. 3. Knowledge Creation and Control
Who creates Knowledge?
Who Controls Knowledge?
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15. Sony’s Flat-Screen Cathode Ray Tube (CRT)
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16. FDI, Trade and IPR Regimes
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17. 4. Rent-Seeking Institutions
Political Expropriations
Legal / Contractual Environment
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18. FDI, Trade and IPR Regimes
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19. Putting a Lid on Rent-Seeking Behaviour
Long-Run Growth ( )
(Skilled Sector Tariffs) – (Unskilled Sector Tariffs)
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20. Determinants of FDI, Location of Production and Trade
Political Expropriation
Contracting Environment
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21. Virtually all of international trade in manufactures and services is done via multinationals. 1/3 is done within a firm, 1/3 is done at arm’s length in which both sides are MNCs and 1/3 is done at arm’s length in which one side is an MNC.
In short, the international location of production is determined by FDI.
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22. In the 1990s FDI grew dramatically
In the 1990s FDI grew dramatically. The usual explanation is that it was driven by (in order of importance)
technological forces related to the ability to direct a firm from a distance (ICT),
the M&A wave which reflected changing managerial views about economies of scope versus core competence,
FDI liberalization in developing countries,
falling transportation costs, and
trade liberalization.
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23. After growing since 1991, FDI contracted substantially in 2001.
Causes (in order of importance):
Bursting of the bubble with its implications for equity finances, especially M&A activity and the consolidation of core competences.
Slowing of economic activity in the major industrial economies.
Sept. 11, war, deflation, SARS
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