Transnational Production

Hundreds of books, theses, government reports and thousands of papers in academic and professional journals have been written on the subject of transnational production, the causes of foreign direct investment (FDI) and the costs and benefits of inbound foreign investment for a host country. Scarcely a day goes by without a newspaper or magazine article praising or blaming what is now often referred to as the globalization of business activity. Despite, or perhaps because of, the extensive literature on transnational production, no consensus exists on either the causes or impact of this phenomenon, although it is widely agreed that the growth of transnational production has profoundly shaped the evolution of the global economy. For example, the current rhetoric of globalization assigns a crucial role to changes in the global production structure. However, it should also be noted that attention to the role of large international firms first arose in the 1960s. Prior to the current interest in globalization, students of the global political economy had developed an awareness of the impact of the changing production structure on international relations. The global production system is a complex process, with millions of workers and workplaces integrated into diverse local, national, regional and global systems. The relationship between discrete centres of production and the global economy cannot be captured through any simple model.