The low cost production imperative and foreign direct investment decision by small and medium sized enterprises

Kuepfer, Roland (2010) The low cost production imperative and foreign direct investment decision by small and medium sized enterprises. PhD thesis, University of Glasgow.

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Global production shifts in the form of foreign direct investments are reshaping the economic map: one of the outcomes is today’s global production system. The firms in focus are confronted with the effects of the reshaped economic map, especially with the differences in production conditions of nations. The new situation, which has emerged, is summarised by the term ‘low cost production imperative’. Consequently, the purpose of this dissertation is to empirically explore the notion of the ‘low cost production imperative’; and to investigate the implications and consequences of the low cost production imperative for internationalisation decision-making.

Scholars of academic studies summarise that fairly little is known about companies’ foreign direct investment decision-making processes and the combination of the determinants with location-specific variables with the strategic motivation of the investing firm. It is assumed even more rarely, that investigations combine the knowledge based on which firms identify important location-specific variables under an enforcing strategic motive and then have to decide a location choice in a low cost operation area.

The research is carried out with the eventual aim of generating theory and producing insights into the strategic management practices of the firms in focus and their position in relation to uncertainty, predictability, and preparedness for the outcome of their decision-making related to the phenomenon. The methodological conduct of this inquiry is framed within the qualitative paradigm. The methodological contribution lies in the combination of applied methodologies and modus operandi so that a rich and holistic insight into the phenomenon will be achieved.

The research results show a rich variety in outcomes and details from the cases regarding their examination with the determinants important for a successful foreign direct investment. It is evident in all the cases that decision makers behave according to different rules than those assumed much of in the international business literature. Further, the phenomenon is identified as a serious outside force that causes firms to consider a decision to look abroad or more detailed, to look for efficiency in distant regions. This dissertation identifies details of mentioned aspects and calls for applications in future research in international business.

Item Type: Thesis (PhD)
Qualification Level: Doctoral
Keywords: SMEs Internationalisation, Decision-making, FDI, Location Advantages, Global production system
Subjects: H Social Sciences > HF Commerce
H Social Sciences > HB Economic Theory
Colleges/Schools: College of Social Sciences > Adam Smith Business School
Supervisor's Name: Jones, Prof. Marian and Macbeth, Prof. Douglas
Date of Award: 2010
Depositing User: Roland Kuepfer
Unique ID: glathesis:2010-2262
Copyright: Copyright of this thesis is held by the author.
Date Deposited: 11 Nov 2010
Last Modified: 10 Dec 2012 13:53

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