Abstract
The article analyzes the international production of multinational enterprises (MNEs). It presents some theoretical approaches to the analysis of international production, such as fragmentation theory, global value chains (GVCs) theory. The article argues that at the present stage of the world economy internationalization, there are two trends in the localization of MNEs global chains. The first trend indicates a slowdown of GVCs growth in the last seven years. The second trend characterizes the restructuring of GVCs. It indicates the backward movement of certain international production fragments to the MNEs home countries. Among the major factors that have slowed the growth of international MNEs production, the article analyzes the political instability and low economic dynamics of some FDI exporting countries. Changes in the location of global value chains are driven by technological, economic and geopolitical factors. Fourth industrial revolution, the robotization of production and new technologies for shale oil and gas in the US are changing the traditional determinants for GVCs localization. They have caused the relocation of many businesses from countries with the cheap labour to MNEs home countries. The article also highlights that the important factors of GVCs restructuring are the fiscal mechanisms implemented by the US administration, including tax reform. But the short-term and long-term effects of such measures differ significantly. Finally, the third important factor in the dynamics and restructuring of multinational enterprise network production is the geopolitical risk and political uncertainty. The trade war between the US and China has had a particularly significant impact on the current global value chains rebuilding.
Highlights
In recent decades international production of multinationals has reached a global scale
More and more countries and firms are beginning to specialize in the individual stages, links, value creation functions within individual global value chains (GVCs), which defines the new specialization of these economic units in the world economy [Baldwin, & Lopez-Gonzalez, 2015]
The United States – Mexico – Canada Agreement (USMCA) has high competitiveness, which has already been reached in the previous agreement, and strengthens the positions of the participating countries individually, enabling them to produce goods and services that meet the needs of the world market, while increasing the incomes of their citizens, which is indicative of ability to withstand competition in international trade
Summary
The general statement that the stable functioning of the banking sector is one of the dominant features of the efficient functioning of the entire economy has been clearly confirmed by the last global economic crisis of 2007-2009. The Basel III documents provide for a gradual transition to a new level of regulatory requirements for credit institutions. In addition to a significant increase in banking system-wide operational standards, Basel III envisages a gradual transition to a new level of specific requirements for credit institutions. Based on fundamental provisions, including main indicators of the Basel III international agreement, these documents set minimum requirements for banking and investment institutions which are involved in credit operations. Another important European regulatory document oriented at reducing credit risk is Directive 2014/17/EC [7].
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