PSCI 4356 Lecture Notes - Lecture 2: Product Market, Ground Field, Greenfield Project
22 Mar 2017
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Document Summary
Monday, march 6, 2017 8:34 am: multi-national corporations. Have operations in more than one country. They have control over activities in these areas - exporters do not: foreign-direct investment. Shows up in balance of payments, country level statistic. Mncs are the actors behind it, needs to have at least 10% control: what does not count as fdi. Throughout 1945-2000 these were the primary sources of fdi. Last 20 years has seen growth from bric countries, especially china. When they started going to developing markets, they were very focused: buying stock of foreign countries (need to buy controlling stake, historical fdi flows, quite concentrated in particular places, horizontal fdi. You need to expand into new markets overseas. This is what dominated traditional developed-developed fdi. Firm-specific assets: something they own allows them to compete in foreign markets on their terms, maybe they know the best way to make a product, best marketing, etc, vertical fdi, product market (sectoral) effects.
