Interlinking Production Across Countries


 
 
Concept Explanation
 

Interlinking Production Across Countries

Interlinking Production Across Countries: Usually, MNCs want to minimize their costs and thus set-up production centres in countries where the factors of production like raw materials, skilled labour, etc are assured at cheap rates. They also look for government policies that look after their interests.

Ways/Modes of Interlinking Production across Countries

MNCs are spreading their production and interacting with local producers in various countries across the globe by setting up partnership with local companies, by using local companies for supplies, by competing with local companies or by buying them up. Due to their strong influence, a production of MNCs in widely dispersed locations is getting interlinked.The ways are as follows :- 

  • FDI ( Foreign Direct Investment )
  • By entering in to partnerships/joint ventures
  • Buying Out local Companies/Mergers/takeovers
  • By Giving Orders/Contracts to Local Companies for supplies . 
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