Understanding the Multinational Enterprise (MNE) and Foreign Direct Investment (FDI) is a key issue in economic theory and business. Since the emergence of the contemporary MNE at the end of the 19th century, changes in the macroeconomic and microeconomic environment, forced multinationals to change as a response to the rise of new technologies and products, the wider international division of labour and of course the greater integration of production, services, and – financial and other – markets. This changing process became more intense after the 1960s when U.S. and Japanese MNEs emerged as basic players in the international chessboard. Accompanied by the traditional European MNEs formed a triad that still dominates FDI in the world.
The changing geography of international production and investment reflects the dynamic interaction of many economic, organizational and policy factors. While many of these factors have long been relevant, their combination today represents the new forces influencing MNEs' location decisions. A simplistic approach of FDI towards location would not be appropriate to allow us to understand the complexity of international investments decisions. What is needed is a multidisciplinary approach of the phenomenon. It is the aim of this module to offer this multidisciplinary approach to students.
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