CO SCI 136 Lecture Notes - Lecture 16: Dutch Disease, Comparative Advantage, Outsourcing
Document Summary
Blyde, juan (editor): synchronized factories latin america and the. Caribbean in the era of global value chains , inter-american. Offshoring strategies = unbundle production processes: vertical fdi : delegate part of production process to an affiliate in another country; Inputs will be used downstream by the mne supply chain: foreign outsourcing: outsource part of process to independent firm in other country, offshoring: international fragmentation of the production process either due to vertical fdi or foreign outsouring. Internationalization decision: should companies make us of vertical fdi vs foreign outsourcing. The short answer is that their production process could not be divided easily: reasons for fragmentation: Reduction in trade cost (tariffs decrease, trade agreement, ad valorem tariff decrease) Reduction in transportation costs ( cargo, plane, lower freight rates, Emerge of logistic companies ( supply chain management firms, freight forwarder increased 3-8 times. Reducded information costs & improved communication ( computer,
