If there is a term which can best subsume current trends in development of politics, society and economics it would be globalization. Major drivers of the globalization process are multinational companies (MNCs). The value of their foreign direct investments (FDI), as part of internationalization strategy, has enormously increased in the last decades. This development allows for their continuous strive for competitiveness through opening up new markets or lowering their costs as a result of economies of scale or a beneficial business environment in the target countries. Thereby the degree of international division of labor shows an upward trend underpinned by the increasing permeability of borders in regard to goods, services, capital and people. Above all lower communication barriers facilitate the operation of cross-border production networks.
As the thesis will state Central European Countries have experienced a tremendous increase in FDI inflows in the last 10 years which definitely contributed to a faster privatization and deregulation process. Their attractiveness to foreign investors has increased in that way that locations in Central Europe take an important part in the production network of MNCs.
The key question of this thesis is: What are the major reasons for multinational companies to invest in Central Europe through foreign direct investment and which role do production networks play for an international company? This question will be examined by regarding the example of Continental AG - a German component supplier to the automotive industry.
The hypothesis is first that Continental AG has established a multinational production network. Secondly it is to be proven that locations in Central Europe play a significant role for Continental AG due to cost-based as well as marketbased considerations.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Key Question and Hypothesis
- Methodology
- Structure of This Thesis
- Foreign Direct Investment (FDI) in Central Europe
- Definition and Types of FDI
- FDI Development Worldwide With a Closer Look on Central Europe
- The Attractiveness of Central Europe for Foreign Investors
- Favorable Location Factors in Central Europe
- Multinational Companies (MNCs)
- Definition of MNCs
- The Importance of FDI for MNCs and their Basis for Decision-making
- Continental AG as an MNC Operating in Central Europe
- The Development and Character of the Automobile Industry
- Continental AG - Structure and Strategy
- How does Continental Automotive Systems Organize its Production Network with Special Regard on Central European Locations?
- Overview on Continental Automotive Systems
- How does CAS Organize its International Production Network - The Example of Brake Booster Production
- Which Reasons Determine the Location Choice for CAS – The Example of a Greenfield Investment in Slovakia
- Conclusion
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This thesis explores the dynamics of Foreign Direct Investment (FDI) in Central Europe, focusing on the organizational strategies of multinational corporations (MNCs) in the automotive industry. It seeks to understand how these companies structure their production networks in the region, highlighting the role of location factors and the specific case of Continental Automotive Systems (CAS) as a subcontractor to the automotive industry.
- The impact of FDI on Central European economies and its significance for regional development.
- The factors influencing the location decisions of MNCs, particularly in the automotive sector.
- The role of production networks in globalized manufacturing, including the integration of Central European locations.
- The specific case study of CAS, analyzing its production network organization and its decision-making process in Central Europe.
- The influence of economic and political factors on MNC investment decisions in Central Europe.
Zusammenfassung der Kapitel (Chapter Summaries)
- Introduction: This chapter introduces the central research question and hypothesis, outlining the methodology used and the structure of the thesis. It emphasizes the focus on FDI in Central Europe and the automotive industry, specifically on CAS.
- Foreign Direct Investment (FDI) in Central Europe: This chapter provides a definition of FDI and its types, followed by an overview of FDI development worldwide and in Central Europe. It examines the attractiveness of Central Europe for foreign investors and highlights favorable location factors in the region.
- The Attractiveness of Central Europe for Foreign Investors: This chapter delves deeper into the factors driving FDI in Central Europe, focusing on economic, political, and social aspects. It explores the region's strengths and challenges for foreign investors.
- Multinational Companies (MNCs): This chapter defines MNCs and discusses their importance in the context of FDI. It examines the decision-making processes of MNCs and their strategies for international expansion.
- Continental AG as an MNC Operating in Central Europe: This chapter introduces Continental AG, a prominent MNC operating in Central Europe, focusing specifically on Continental Automotive Systems (CAS). It analyzes the development of the automobile industry, the structure and strategy of Continental AG, and how CAS organizes its production network with special regard on Central European locations.
Schlüsselwörter (Keywords)
The core keywords and topics of this thesis include: Foreign Direct Investment (FDI), Central Europe, automotive industry, multinational companies (MNCs), production networks, location factors, Continental Automotive Systems (CAS), subcontracting, Greenfield investment, economic development, and regional integration.
- Quote paper
- Jana Scharfschwerdt (Author), 2005, FDI in Central Europe: How Companies Organize Production Networks? Applied to a subcontractor to the Automotive Industry, Munich, GRIN Verlag, https://www.grin.com/document/44915
