Non-Equity Forms of Foreign Economic Involvement and the Theory of International Production

One of the features of the past two decades has been the emergence of new institutional modes of international economic involvement by firms. Traditionally, the literature has focused attention on two main channels of such involvement; first, spot exchanges of assets, goods or services between independent economic agents of different nationalities at arm's length prices, .and second, the hierarchical extension of the activities of firms across national boundaries via foreign direct investment (FDI).