Foreign Direct Investment (fdi), Global Sourcing and Industrial Linkages

Over the last two decades, the use of external outsourcing has become an important strategic issue, with increasing recognition of the benefits that effective outsourcing and international production strategies can provide. In the never-ending quest for greater efficiency and cost savings, many companies have decided to source parts and components from low-cost suppliers globally, and in many instances have transferred certain segments of or the entire production process to new locations overseas. Indeed, international procurement and novel offshore integrated production arrangements have become critical to the competitiveness and success of global firms. Many corporations now have established presences across North America, Europe and the Asia-Pacific region, often away from their own corporate headquarters and traditional markets. As a result, FDI and trade have grown in an unprecedented fashion (UNCTAD 2008).