In 2018, baijiu giant Jiangsu Yanghe Distillery Co., Ltd. acquired 12.5% of one of the largest global wine conglomerates in Chile, VSPT Wine Group, for US$65 million. The transaction was the first of its kind in the South American country, in which a Chinese baijiu producer purchased a stake in a Chilean wine company. The transaction involved considerable strategic and business planning and the support of experienced legal and financial advisors. This case study first analyzes how a change in alcohol consumption habits in China was a critical factor for Yanghe in deciding to carry out the transaction and the rationale behind choosing a target from the “new wine world.” It then explores how the Chile-China Free Trade Agreement has increased the amount of wine exported to China and how Chilean wine is perceived as “value for money” among Chinese consumers. Finally, it discusses how this transaction is an example of how Chinese state-owned enterprises have learned rapidly from their outward foreign direct investments and how Chinese investors are increasingly using experienced advisors to help inform their overseas investments.

This case study explores the State Grid Corporation of China’s (SGCC’s) localization strategies within the Belo Monte hydroelectric project in Brazil, highlighting the challenges and lessons learned by Chinese state-owned enterprises (SOEs) as they expand into Latin America. Over recent decades, Chinese SOEs have emerged as potential collaborators for Latin American countries seeking investment and technology for critical infrastructure projects. SGCC’s involvement in constructing the Xingu-Estreito transmission line for the Belo Monte project stands as a prime example. This line, among the world’s largest and first to implement ±800kV ultra-high-voltage technology outside China, marks not only an engineering triumph for SGCC but also a significant business and legal accomplishment. The company adeptly navigated Brazil’s complex legal environment, tackling multifaceted regulatory, financial, and environmental challenges. This case study, based on government and corporate documents as well as confidential interviews, examines SGCC’s strategies for procurement, financial structuring, environmental licensing, and operational management in the context of this grandiose transmission line.

Chapter Two focuses on the long-term effects of foreign direct investment at the subnational level in less developed peripheral regions. It identifies the different types and mechanisms of foreign direct investment in more developed (core) regions and less developed (peripheral) regions. It argues that positive long-term development effects of foreign direct investment in host regions depend on linkages between foreign-owned and domestic firms and spillovers from foreign-owned to domestic firms. It argues that in the long run, foreign direct investment tends to benefit core regions more than peripheral regions. Chapter Two also critically evaluates the most important conceptual approaches to foreign direct investment in peripheral regions developed in economic geography since the 1970s, namely the branch plant economy and truncation, new regionalism, new international division of labor and spatial divisions of labor, and the global production networks perspective.

Chapter Seven analyzes the progress of the transition from the production of vehicles with internal combustion engines to the production of electric vehicles in eastern Europe. The transition is considered in the context of the development of the automotive industry in eastern Europe since the early 1990s and the relative position of the east European integrated periphery in the European automotive industry value chains and production networks. The chapter argues that foreign firms are driving the transition, while the role of the east European governments and local firms is much less significant. The transition is slower than in western Europe, and eastern Europe will continue to produce internal combustion engine vehicles for longer. Eastern Europe will continue to rely on its competitive advantage of low production costs, especially low labor costs, to continue to attract foreign direct investment in the automotive industry. The chapter considers the consequences of the transition on the position of east European countries in automotive value chains, production networks and the division of labor in the European automotive industry.

Chapter Three examines the regional development effects of foreign direct investment in the integrated peripheries of the automotive industry by analyzing supplier linkages between foreign subsidiaries and domestic firms. It develops the spatial concept of integrated peripheries in core-based transnational production networks to explain the rapid growth of the automotive industry in Europe’s peripheral regions. Conceptually, it draws on the dynamic notion of uneven development in contemporary capitalism. Namely, it draws on the concept of spatiotemporal fix and on the global production networks concept of strategic coupling to investigate the mode of articulation of integrated peripheries into transnational macroregional production networks. Empirically, it analyzes the quantity and quality of supplier linkages in the automotive industry of Slovakia. The empirical analysis uncovered weak and dependent supplier linkages between foreign subsidiaries and domestic firms, which limits the potential for technology transfer and undermines potentially positive long-term regional development effects of large foreign direct investment by automotive industry corporations.

Chapter Eight summarizes basic points and arguments of the book and discusses its conceptual and methodological contribution to the global production networks and global value chains perspectives, and to the understanding of the changing geography of the contemporary European automotive industry. The topics include the long-term effects of foreign direct investment for economic development in less developed countries and in peripheral regions; the spatial concept of integrated peripheries and its application in the explanation of automotive industry’s gradual expansion from core to peripheral regions; the regional development effects of automotive foreign direct investment in integrated peripheries; the internationalization and restructuring of the European automotive industry; the core-periphery structure of the European automotive industry; value creation and value capture in the automotive industry; and the transition to the production of electric vehicles in eastern Europe.

Chapter One reviews the history of foreign direct investment in less developed world regions and less developed countries and considers the empirical evidence about its effects on economic development. It critically evaluates main theoretical and conceptual perspectives on the effects of foreign direct investment in less developed countries. I argue two main points. First, the empirical evidence points strongly towards very uneven and limited positive long-term development effects of foreign direct investment in less developed countries. Second, mainstream and heterodox approaches to foreign direct investment came to contrasting conclusions about its potential long-term development effects in less developed countries.

This chapter recapitulates the dual institutional framework and the empirical findings of this book. It then discusses how the findings contribute to ongoing policy and theoretical debates.

After the 1997 crisis, South Korea implemented the same industrial policy as before, promoting R&D as a major means. Yet moving labor from traditional to modern service industries came to mainly comprise the structural transformation. Some chaebol firms became true global players, but chaebol system has become less relevant for structural transformation while their corporate governance remains poor. Foreign ownership has not helped to improve it because of its own problems. The government promoted venture business aggressively, which was not so successful initially; however, venture business has become ever more important over the years. The inducement of foreign direct investment followed a similar pattern, but South Korea’s direct investment overseas came to outweigh foreign direct investment. The labor productivity and financial soundness of small and medium-sized enterprises fell in relation to large enterprises while they came to account for a higher share of employment, deepening the labor market dualism.

This chapter argues that it is important to get the numbers right, to know the sources of information on international trade- and financial flows and multinational activity, And to familiarise yourself with the basics of accounting identities as this may lead you to avoid common pitfalls. We discuss the relationships between the current account and the capital and financial account of the balance of payments, as well as the information this provides on multinational activity. We review the funding options for multinational activity and provide information on the developments of the main financial flows in the world. We conclude that there is a pattern in the development of international capital mobility, which was already high at the end of the nineteenth and beginning of the twentieth century, then declined substantially in the interbellum to rise again from approximately 1980 onwards.

The chapter discusses cybersecurity from the perspective of human rights protection. It first identifies adopting border measures as one approach to fulfilling a state’s duty to protect its citizens against human rights violations caused by cybercrimes. It then examines the tension between these FDI restrictive border measures and states’ investment protection and promotion obligations under IIAs. The analysis demonstrates a limitation in the current international law framework in which invoking the concept of national security remains the only means for states to address cyberthreats, which involves the risk of an accelerating shift to protectionism.