International production networks and foreign investments: interdependence in 21 st century

Abstract

The article presents the results of research on the interdependence of international production networks and foreign investments in the twenty-first century. It is determined that the formation of international production networks takes place between countries that are open for trade and investment, as the transfer of production segments first takes the form of investments, and later, of international trade. The dynamics of Greenfield investments are considered, and key trends are determined: their total volume has increased in recent years, and the relationship between the corresponding shares of production and service sectors changes in favor of the latter. It is substantiated that this is the result of the accelerating spread of technologies embedded in the field of goods and capital, especially in the areas where they are most important for international competitiveness. In the course of the study, it was determined that the interdependence of foreign investment and international production networks creates a new reality of international trade, in which they sometimes collide and affect each other. It is substantiated that the proliferation of international production networks in the service sector makes relevant a corresponding reorganization of international cooperation on trade policy issues.