Abstract

This article analyzes a multinational enterprise (MNE) theories from the first pioneering papers of S. Hymer and the modern approaches to studying these institutions. A special focus is placed on the one of the research schools that studied the fragmentation of international production and the global value chain (GVCs) creation. In this context, various theoretical approaches to the study of modern global MNE networks are considered, the theory of trade in tasks and the macroeconomic approach to the evaluation of fragmentation effects. The paper argues that the concepts of MNEs international production and GVCs are interlinked, although not equal. Sometimes they are used as synonyms, but they characterize the contemporary process of internationalization from different perspectives. It shows the various types of organization of global value chains, such as the horizontal and vertical integration of production. Within such networking systems of multinational enterprises there are complex hierarchical relationships between individual participants and links. Technological slicing of production into separate fragments requires MNE to use not only own equity- controlled affiliates, but also the offshore production of partner firms.

Highlights

  • The paper argues that the concepts of multinational enterprise (MNE) international production and global value chains (GVCs) are interlinked, not equal

  • The latest two decades are marked by radical change in international production of multinational enterprises (MNEs)

  • Institutional and organizational structure of MNE organizing their production in form of global value chains (GVCs)

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Summary

MNE THEORY AND GLOBAL VALUE CHAINS

A special focus is placed on the one of the research schools that studied the fragmentation of international production and the global value chain (GVCs) creation. In this context, various theoretical approaches to the study of modern global MNE networks are considered, the Actual problems of international relations. The paper argues that the concepts of MNEs international production and GVCs are interlinked, not equal Sometimes they are used as synonyms, but they characterize the contemporary process of internationalization from different perspectives. It shows the various types of organization of global value chains, such as the horizontal and vertical integration of production.

Introduction
International production and GVCs
Motorola Dell
Conclusions
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