Global Outsourcing and FDI: Can the Least Developed Countries Participate in the Process?

Today’s corporations have a much wider set of options how and where to organize their production and sales, including options to outsource the supply of certain parts to external producers—either in their home country or offshore. These changes in the structure, scale and geographical distribution of the production and supply chain of the multinational corporations, were set off by the rapid technological progress, the sharp reduction in transport costs, the wide range of international agreements to facilitate trade and, in particular, by the spread of global and highly effective information and communication technologies. These changes contributed, in turn, to wider changes in the structure of international trade. The paper examines the forces that drove these changes and their impact on the less developed countries.