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Transformations of Global Prosperity

How Foreign Investment, Multinationals, and Value Chains are Remaking Modern Economy

  • Caf Dowlah

About this book

Introduction

This book presents an in-depth understanding of the transformation of modern economy in the twenty-first century by examining the interface and interplay of three key forces of contemporary global economy—Foreign Direct Investment (FDI), Multinational Enterprises (MNEs), and Global Value Chains (GVCs)—and how the emerging nexus of these forces has already ushered in revolutionary transformation in global production, investment, trade, and employment in recent decades.

A distinctive feature of the book is that it situates the contemporary GVC revolution—that envisages fragmentation and dispersion of production processes across the world based on competitive costs and quality—as a natural progression of the traditional FDIs-MNEs nexus, which emphasized internationalization of production and trade in search of profits, resources, markets, or cheap labour. Moreover, the book provides a comprehensive analysis, from historical, theoretical and empirical perspectives, of both traditional FDIs-MNEs Nexus that dominated the world economy until the end of the twentieth century, and of the New Nexus of FDIs-MNEs-GVCs, that has opened grand opportunities for global prosperity by providing short-cut paths to industrialization and economic growth for less developed countries.          

As an exemplar, the book examines GVCs in automobiles—a medium-tech manufacturing activity with numerous backward and forward linkages—to demonstrate how the FDI-MNE-GVC interface in this sector has wedged industrialization, employment, and trade in six emerging countries/regions—Brazil, Central and Eastern Europe, China, India, Mexico and Thailand.

Keywords

Global value chains Multinational enterprises Foreign direct investment Emerging economies Globalization Perfect competition-based theories Hymer Vernon Krugman Dunning Trade complementing theory Market imperfection theories Transition economies Income inequality Intra-firm trading Transfer pricing Automobile industry

Authors and affiliations

  • Caf Dowlah
    • 1
  1. 1.City University of New YorkNew York, NYUSA

Bibliographic information

  • DOI https://doi.org/10.1007/978-3-319-71105-8
  • Copyright Information The Editor(s) (if applicable) and The Author(s) 2018
  • Publisher Name Palgrave Macmillan, Cham
  • eBook Packages Economics and Finance
  • Print ISBN 978-3-319-71104-1
  • Online ISBN 978-3-319-71105-8
  • Buy this book on publisher's site