Refining of FDI motivations by integrating global value chains’ considerations

Purpose – The purpose of this paper is to show how the nature of the activities conducted by multinational enterprises globally and the governance modes are changing. Essentially, multinational enterprises (MNEs) structure and organize their activities in a more complex, fragmented and geographically dispersed manner. In this paper, the authors suggest that the evolution of MNEs and the rising importance of global value chains (GVCs) require a refinement of FDI motivations rather than a drastic change in the existing categories. The authors begin with a historical overview of evolving firms’ international strategies and FDI motivations, before developing arguments to support the view that the fine slicing of economic activities on a global scale, and the combination of governance modalities ought to be integrated into the presentation of investment motivations. The discussion ends with implications for governments and policymaking. Design/methodology/approach – This paper is a conceptual paper. Findings – Key suggestions to refine the presentation of investment motivations are presented, together with policy recommendations. Originality/value – This paper provides a novel approach to ways of refining investment motivations by integrating GVC considerations, and drawing policy implications from this process.