THEORIES OF INTERNATIONAL PRODUCTION

Author: Assoc. Prof. Dr. Diana Sabotinova (Burgas Free University)

Keywords: international production, multinational enterprise (MNE), foreign direct investment (FDI)

International production may be of resource-based, import-substituting, export-platform or globally integrated kind, each of which raises distinctive considerations and each of which affects home and host countries in different ways. The use of particular theories often reflects the issues addressed and the questions asked. Theories of international production have drawn on six separate branches of economic theory: the theories of international capital movements, trade, location, industrial organization, innovation and the firm. International production can be analysed at three levels: macroeconomic (examining broad national and international trade), mesoeconomic (considering the interaction between firms at an industry level) and microeconomic (looking at the international growth of individual firms).

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