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International Trade and Economic Development$
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Rajat Acharyya and Saibal Kar

Print publication date: 2014

Print ISBN-13: 9780199672851

Published to Oxford Scholarship Online: September 2014

DOI: 10.1093/acprof:oso/9780199672851.001.0001

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International Outsourcing, Offshoring, and Industrialization Strategies

International Outsourcing, Offshoring, and Industrialization Strategies

(p.271) 11 International Outsourcing, Offshoring, and Industrialization Strategies
International Trade and Economic Development

Rajat Acharyya

Saibal Kar

Oxford University Press

Organization and location of different stages of production are done either through vertical foreign direct investments, outsourcing, offshoring, or through international sub-contracting. These business and production strategies adopted by the multinational companies of the developed countries distinguish the present era from earlier global practices. The developing countries, on the other hand, have often encouraged outsourcing of production processes by multinational companies via the establishment of export processing zones or special economic zones. High degrees of production fragmentation and growth of international production networks have changed the nature and dimension of North-South trade. Vertical production specialization by countries and consequent vertical intra-industry international trade of components and unfinished or semi-finished products now constitute a larger share of trade. This chapter discusses these dimensions of trade as an important topic in the entire subject.

Keywords:   outsourcing, reorganization, fragmentation, intermediate goods, export processing zone, special economic zone, welfare

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